How can Mr. Harper even attempt such an endeavour when:
The proliferation and scope of the corporation have now reached mammoth proportions, there are over 40, 000 corporations in the world, and two hundred giant corporations now control over a quarter of the world’s economic activity. Philip Morris, an American corporation which operates in 171 countries has annual revenues larger than that of New Zealand’s economy. Of the 100 largest economies, in the world, 51 are corporations, only 49 are countries. Corporations are calling the shots and in fact actively formulating policy.
Today, the public corporation itself operates as a form of representative government. In the olden days ‘the church’ called the shots today ‘BIG BUSINESS’ have taken over the power that was once held by ‘DEMOCRATIC GOVERNMENTS’. We have a government in power who stated that they plan, “to go after gas companies with price fixing legislation that would make it easier to prove collusion”
(http://news.sympatico.msn.ctv.ca/Home/ContentPosting?newsitemid=CTVNews%2f20080924%2felection2008_economy_worries_080925&feedname=CTV-TOPSTORIES_V3&show=False&number=0&showbyline=True&subtitle=&detect=&abc=abc&date=TrueHarper wants to crack down on gas-price fixing).
Is it not clear that we as consumers have been and are being gouged by these oil companies?
Continuing in this same article, “Tories say they will widen the price-fixing provisions in the Competition Act and almost triple the maximum penalties to 14 years in prison and a $25-million fine”. Certainly we can count on never witnessing One Company being fined in our lifetime.
The revenue collected by our ‘DEMOCRATIC CANADIAN GOVERNMENT’ is filling the coffers, why would they enforce ‘provisions in the Competition Act’; to reduce the revenue they are collecting from these oil sands, oil and gas, and pipeline companies?
So what part does Corporate Governance play in this scenario?
We are all stakeholders in our communities, some of us are shareholders in these organizations. Shareholders are the owners of the corporation who are imbued with the authority to elect directors to represent their interests and govern the corporation. We need to address this situation that has gone corrupt, distorted, and awry. We can exercise our votes either through our voting power or through reducing our demand. Please read my article
(http://www.advaitaashrama.org/pb_archive/2006/PB_2006_September.pdf)
for some solutions to this crisis in our global society.
Friday, September 26, 2008
Wednesday, August 20, 2008
New Journal Article a must read on Shell Canada
Dr. Rookmin Maharaj
Shell Canada: Over a Decade of
Sustainable Development Reporting Experience
Abstract
Purpose: This paper investigates what motivated Shell Canada, a subsidiary of Royal Dutch Shell, to be one of the first companies in the world to report its environmental initiatives in 1991. It explores how Shell Canada driven by a set of core values and business principles, continues to make strides in the quality of its sustainability reporting and communication.
Design/methodology/approach: Shell historical reports and documents were reviewed and interview data gathered from company personnel.
Findings: Shell Canada has gained a reputation for striving toward stakeholder engagement and transparency in its reporting as well as through its actions.
Practical Implications: This paper offers advice to other companies as to how to improve their corporate communications regarding their environmental and sustainability performance.
Originality/value: This paper demonstrates Shell Canada’s efforts to initiate transparent sustainable development reporting and stakeholder engagement, two areas in which other companies can learn from Shell Canada.
Keywords: core values; sustainability reporting; triple bottom line; stakeholder engagement; transparency; Shell Canada
Full paper may be accessed at:
http://www.emeraldinsight.com/Insight/viewContentItem.do;jsessionid=228510D11AF7ED27A9029640C28B8D0B?contentType=Article&contentId=1729339
Shell Canada: Over a Decade of
Sustainable Development Reporting Experience
Abstract
Purpose: This paper investigates what motivated Shell Canada, a subsidiary of Royal Dutch Shell, to be one of the first companies in the world to report its environmental initiatives in 1991. It explores how Shell Canada driven by a set of core values and business principles, continues to make strides in the quality of its sustainability reporting and communication.
Design/methodology/approach: Shell historical reports and documents were reviewed and interview data gathered from company personnel.
Findings: Shell Canada has gained a reputation for striving toward stakeholder engagement and transparency in its reporting as well as through its actions.
Practical Implications: This paper offers advice to other companies as to how to improve their corporate communications regarding their environmental and sustainability performance.
Originality/value: This paper demonstrates Shell Canada’s efforts to initiate transparent sustainable development reporting and stakeholder engagement, two areas in which other companies can learn from Shell Canada.
Keywords: core values; sustainability reporting; triple bottom line; stakeholder engagement; transparency; Shell Canada
Full paper may be accessed at:
http://www.emeraldinsight.com/Insight/viewContentItem.do;jsessionid=228510D11AF7ED27A9029640C28B8D0B?contentType=Article&contentId=1729339
Sunday, July 6, 2008
Dr. Rookmin Maharaj; Corporate Governance Model; Toronto-Dominion Bank (TSX:TD) disclosed Friday a $96-million loss caused by "incorrectly priced"
…………………..AND LIFE GOES ON…………………………….
"It's got to be disappointing for management at TD because they have prided themselves on having not had these issues, where many of their peers have had absolutely devastating related issues," said Brad Smith of Blackmont Capital. TD Bank has spent the last year gliding relatively unscathed through a period where its Canadian peers have been slammed with massive writedowns related to credit losses tied to the U.S. subprime mortgage market....................... The bank's announcement echoed similar risk management troubles faced by the Bank of Montreal (TSX:BMO) early last year when it reported $680 million of commodities-trading losses, mostly from natural gas trading. TORONTO - Toronto-Dominion Bank (TSX:TD) disclosed Friday a $96-million loss caused by "incorrectly priced" financial investments at its operations in London. Canada's second-biggest bank by assets said the employee involved at its TD Securities arm "is no longer with the company" and the Toronto bank is co-operating with Canadian and British regulators investigating the matter.( http://finance.sympatico.msn.ca/investing/news/businessnews/article.aspx?cp-documentid=8438736TD).
Where were the directors?
Who are these so called FINANCIAL ANALYSTS?
For solutions to these ONGOING, NEVER ENDING, GOVERNANCE OVERSIGHT (USED IN THE NEGATIVE SENSE, I.E. OMISSION; FAILURE TO NOTICE). PLEASE READ OTHER ARTICLES ON MY BLOG
It is argued that a combination of legislation, regulation, effective risk management and appropriate sanctions are needed, if such unethical behaviour, and resulting corporate failure, is to be prevented in future. However, what is required is an astute, independent, assessment of these financial collapse debacles. This may establish that failures within these companies' corporate cultures and management systems allow, if not encourage, unethical behaviour by key individuals. COULD IT BE THAT THE CONTINUATION OF THE OLD BOYS CLUB may be the fundamental reason for the blatant disregard and perception of invincibility/groupthink mentality of same. COULD IT BE THAT ONCE AN EMPLOYEE IS INCREASING THE PROFITS AND BOTTOM LINE OF AN ORGANIZATION HE/SHE IS SHELTERED BY TOP EXECUTIVES, WHO MAY TURN A BLIND EYE TO UNETHICAL PRACTICES?Dr. Rookmin Maharaj’s research on:Corporate Governance and the Board of Directors:Study of the Importance of the Role of the Formal & Informal SystemsInvestigates corporate governance issues from a behavioural viewpoint. It makes a distinction between strict adherence to formal rules and regulations: CEO/Chair separation, independence of board members and board size and informal characteristics of board members: knowledge, values, and groupthink.There are three main conclusions from her research and corporate experience:1. Clearly proves that formal rules and regulations are inadequate; they have little effect upon decision making by board members. Informal characteristics must be considered in unison with the formal system when nominating board members, management and employees in order to restore shareholder confidence and to rebuild trust in corporate governance.2. Similar values and groupthink can contribute positively to corporate decision making. However, there is a high possibility for groupthink and values to become redundant, masking board members’ and managements’ knowledge thus affecting their decision making process.3. Skills matrices that include questions related to values, knowledge and groupthink should be considered by corporations to ensure the nomination of well-rounded members, management and employees.Changes to board process, and board decision making, are seminal in preventing future Enron and WorldCom fiascoes. It is only by changing the behaviours of the board of directors, through adopting skills matrices, that sweeping changes can occur. In the past boards have asked: who are our board members? However, the most important question a board can ask today is: how can the skills and knowledge of our board members be used in service of the strategic direction of the corporation? This can be achieved by recruiting new board members, management and employees who fill the needs of an organization, in contrast to nominating ‘friends’ and continuing the tradition of the old boys club.Dr. Maharaj argues that, and has tangible evidence, that what should be done is a forensic audit on 'the people that we hire' and 'employees, managers, board members' should also conduct an audit on their potential employers. What is your opinion?Does your opinion change with this update?
"It's got to be disappointing for management at TD because they have prided themselves on having not had these issues, where many of their peers have had absolutely devastating related issues," said Brad Smith of Blackmont Capital. TD Bank has spent the last year gliding relatively unscathed through a period where its Canadian peers have been slammed with massive writedowns related to credit losses tied to the U.S. subprime mortgage market....................... The bank's announcement echoed similar risk management troubles faced by the Bank of Montreal (TSX:BMO) early last year when it reported $680 million of commodities-trading losses, mostly from natural gas trading. TORONTO - Toronto-Dominion Bank (TSX:TD) disclosed Friday a $96-million loss caused by "incorrectly priced" financial investments at its operations in London. Canada's second-biggest bank by assets said the employee involved at its TD Securities arm "is no longer with the company" and the Toronto bank is co-operating with Canadian and British regulators investigating the matter.( http://finance.sympatico.msn.ca/investing/news/businessnews/article.aspx?cp-documentid=8438736TD).
Where were the directors?
Who are these so called FINANCIAL ANALYSTS?
For solutions to these ONGOING, NEVER ENDING, GOVERNANCE OVERSIGHT (USED IN THE NEGATIVE SENSE, I.E. OMISSION; FAILURE TO NOTICE). PLEASE READ OTHER ARTICLES ON MY BLOG
It is argued that a combination of legislation, regulation, effective risk management and appropriate sanctions are needed, if such unethical behaviour, and resulting corporate failure, is to be prevented in future. However, what is required is an astute, independent, assessment of these financial collapse debacles. This may establish that failures within these companies' corporate cultures and management systems allow, if not encourage, unethical behaviour by key individuals. COULD IT BE THAT THE CONTINUATION OF THE OLD BOYS CLUB may be the fundamental reason for the blatant disregard and perception of invincibility/groupthink mentality of same. COULD IT BE THAT ONCE AN EMPLOYEE IS INCREASING THE PROFITS AND BOTTOM LINE OF AN ORGANIZATION HE/SHE IS SHELTERED BY TOP EXECUTIVES, WHO MAY TURN A BLIND EYE TO UNETHICAL PRACTICES?Dr. Rookmin Maharaj’s research on:Corporate Governance and the Board of Directors:Study of the Importance of the Role of the Formal & Informal SystemsInvestigates corporate governance issues from a behavioural viewpoint. It makes a distinction between strict adherence to formal rules and regulations: CEO/Chair separation, independence of board members and board size and informal characteristics of board members: knowledge, values, and groupthink.There are three main conclusions from her research and corporate experience:1. Clearly proves that formal rules and regulations are inadequate; they have little effect upon decision making by board members. Informal characteristics must be considered in unison with the formal system when nominating board members, management and employees in order to restore shareholder confidence and to rebuild trust in corporate governance.2. Similar values and groupthink can contribute positively to corporate decision making. However, there is a high possibility for groupthink and values to become redundant, masking board members’ and managements’ knowledge thus affecting their decision making process.3. Skills matrices that include questions related to values, knowledge and groupthink should be considered by corporations to ensure the nomination of well-rounded members, management and employees.Changes to board process, and board decision making, are seminal in preventing future Enron and WorldCom fiascoes. It is only by changing the behaviours of the board of directors, through adopting skills matrices, that sweeping changes can occur. In the past boards have asked: who are our board members? However, the most important question a board can ask today is: how can the skills and knowledge of our board members be used in service of the strategic direction of the corporation? This can be achieved by recruiting new board members, management and employees who fill the needs of an organization, in contrast to nominating ‘friends’ and continuing the tradition of the old boys club.Dr. Maharaj argues that, and has tangible evidence, that what should be done is a forensic audit on 'the people that we hire' and 'employees, managers, board members' should also conduct an audit on their potential employers. What is your opinion?Does your opinion change with this update?
Friday, July 4, 2008
ILLEGAL GUNS ENTER CANADA FROM THE UNITED STATES OF AMERICA!!!!
Canada is in dire need of effective leadership and Corporate Governance with regards to gun control. Perhaps we should take advice from Toronto Mayor David Miller who wants Ottawa to exert diplomatic pressure on Washington. As Mayor Miller noted if there is lack of control regarding guns in the US, THE PROBLEM will filter through Canada via loopholes like “blue-steel highway right up the U.S. from places where it's easy to get guns to the northeast U.S. and to Canada. Mayor Miller is correct in stating that Canada should make it a national security issue. As Mayor Miller noted there is a direct correlation between the weak U.S. gun laws and people dying on the streets of Canada." This seems a simple deduction and as citizens one would expect the Canadian Government to take a stand and stop dragging their feet with regard to instituting regulations AND ENFORCING THESE REGULATIONS! According to Yahoo news reporter “Public Safety Minister Stockwell Day noted that “any regulation that comes up for review, especially one that's been on the books but never implemented for a number of years, is always addressed to make sure it's current," Day says. If we were current why was a second time offender (according to Yahoo news) “Curtis Coleman caught red-handed smuggling a shipment of guns into Canada from the U.S. again?” Perhaps the slap on the wrist is not enough to curtail this sort of behavior in Canada.
“Mounties found them with backpacks carrying three dozen guns, including two machine pistols, 24 diamonds and US$100,000 cash. Coleman was convicted of smuggling and possessing prohibited or restricted firearms and deported after serving most of a two-year sentence. This time he pleaded guilty to a single count of being in a vehicle with the contraband guns. The judge condemned him for his role in trafficking guns that put the Canadian public at risk and he drew 36 months, less time served awaiting trial” (http://ca.news.yahoo.com/s/capress/080703/national/gun_smugglingThu Jul 3, 3:31 PM). How many lives need to be lost before ANY OR ALL OF the enforcement AGENCIES; THE JUDICAL SYSTEM AND THE Canadian Government, ACTUALLY TAKE A STAND!!!
“Mounties found them with backpacks carrying three dozen guns, including two machine pistols, 24 diamonds and US$100,000 cash. Coleman was convicted of smuggling and possessing prohibited or restricted firearms and deported after serving most of a two-year sentence. This time he pleaded guilty to a single count of being in a vehicle with the contraband guns. The judge condemned him for his role in trafficking guns that put the Canadian public at risk and he drew 36 months, less time served awaiting trial” (http://ca.news.yahoo.com/s/capress/080703/national/gun_smugglingThu Jul 3, 3:31 PM). How many lives need to be lost before ANY OR ALL OF the enforcement AGENCIES; THE JUDICAL SYSTEM AND THE Canadian Government, ACTUALLY TAKE A STAND!!!
Friday, May 9, 2008
WAKE UP AND SMELL THE COFFEE!!!!!!!!!!!!!!!!Tim Hortons
WAKE UP AND SMELL THE COFFEE!!!!!!!!!!!!!!!!
Tim Hortons - just the beginning of this sort of behaviour in Canada where manager (s) are acting a bit overzealously (http://www%20.theglobe%20and%20mail/. com/servlet/ story/RTGAM. 20080507 .wt im bit0507/ CommentStory /National/home/). Perhaps there may be another side to this story, the managers side, however,
Universities, Superstore, Canadian Tire, the police force the Energy Sector are just a few sectors that are bringing foreign workers into Canada without thought about the ramifications of bringing workers (executive staff or lower rank employees) without the proper orientation into Canadian culture.
'So called' Canadian companies are now hiring (in an uncontrollable manner) mangers and senior staff from the United States.
(Calgary has 10% UK bobbys- “But now that expat officers account for roughly 10 per cent of Calgary's police service, forces in the provinces want to slow down foreign recruiting programs and instead redouble efforts to find more home-grown…………..”talent(http://www.thesudburystar/ .com/ Article Display .aspx?e=974170Alberta flooded with bobbys; Calgary, Edmonton look to England to solve police shortage)
PLEASE NOTE CEOs, BOARD MEMEBERS AND MEMBERS OF THE EXECUTIVE, THAT OUR CULTURE IS DIFFERENT FROM THAT OF THE US, UK for example. PLEASE TRAIN, EDUCATE AND TAKE THE TIME TO RECRUIT WITH CARE.
Please remember that good governance can prevent ‘value’ destruction.
Dr. Rookmin Maharaj research integrates the disciplines of Political Science, Education, and Business in the area of corporate governance/Sarbanes Oxley (SOX). Dr. Maharaj has developed a unique model that can be used as a compass by corporations, educational, healthcare, and political institutions to build better boards, management and employees. Her method improves and increases the bottom line/profits of organizations. She is currently consulting with companies in Alberta, Canada on Corporate Governance. She has worked in the energy sector in Alberta Canada for over fifteen years. She has a master’s degree in Higher Education and has taught in France, the Caribbean and in Canada at the University of Calgary and Mount Royal College on Environmental Management and Business.
Visit Dr. Maharaj blog and read her research papers to review a tested Corporate Governance Model that reduces the risk of losing ‘organizational reputation.’ Contact Dr. Maharaj for advice on hiring the ‘right’ employees for the ‘right’ positions
http://corporategovernanceconcerns.blogspot.com/
Tim Hortons - just the beginning of this sort of behaviour in Canada where manager (s) are acting a bit overzealously (http://www%20.theglobe%20and%20mail/. com/servlet/ story/RTGAM. 20080507 .wt im bit0507/ CommentStory /National/home/). Perhaps there may be another side to this story, the managers side, however,
Universities, Superstore, Canadian Tire, the police force the Energy Sector are just a few sectors that are bringing foreign workers into Canada without thought about the ramifications of bringing workers (executive staff or lower rank employees) without the proper orientation into Canadian culture.
'So called' Canadian companies are now hiring (in an uncontrollable manner) mangers and senior staff from the United States.
(Calgary has 10% UK bobbys- “But now that expat officers account for roughly 10 per cent of Calgary's police service, forces in the provinces want to slow down foreign recruiting programs and instead redouble efforts to find more home-grown…………..”talent(http://www.thesudburystar/ .com/ Article Display .aspx?e=974170Alberta flooded with bobbys; Calgary, Edmonton look to England to solve police shortage)
PLEASE NOTE CEOs, BOARD MEMEBERS AND MEMBERS OF THE EXECUTIVE, THAT OUR CULTURE IS DIFFERENT FROM THAT OF THE US, UK for example. PLEASE TRAIN, EDUCATE AND TAKE THE TIME TO RECRUIT WITH CARE.
Please remember that good governance can prevent ‘value’ destruction.
Dr. Rookmin Maharaj research integrates the disciplines of Political Science, Education, and Business in the area of corporate governance/Sarbanes Oxley (SOX). Dr. Maharaj has developed a unique model that can be used as a compass by corporations, educational, healthcare, and political institutions to build better boards, management and employees. Her method improves and increases the bottom line/profits of organizations. She is currently consulting with companies in Alberta, Canada on Corporate Governance. She has worked in the energy sector in Alberta Canada for over fifteen years. She has a master’s degree in Higher Education and has taught in France, the Caribbean and in Canada at the University of Calgary and Mount Royal College on Environmental Management and Business.
Visit Dr. Maharaj blog and read her research papers to review a tested Corporate Governance Model that reduces the risk of losing ‘organizational reputation.’ Contact Dr. Maharaj for advice on hiring the ‘right’ employees for the ‘right’ positions
http://corporategovernanceconcerns.blogspot.com/
Tuesday, April 22, 2008
Asset-Backed Commercial Paper (ABCP) FIASCO
The news media are rampant with news and unwanted/sarcastic advice about the ABCP fiasco, for example, Ms. Deirdre Mcmurdy IN HER ARTICLE:
http://finance.sympatico.msn.ca/investing/deirdremcmurdy/article.aspx?cp-documentid=6671588A $34 billion made-in-Canada mess
Stated:
“There are plenty of lessons for investors and for the investment industry from a made-in-Canada credit crisis. No one ever wants to take responsibility when things go wrong. Blaming someone else for your bad decision is Human Nature 101. But in this case, that reality pretty much guarantees that the individual ABCP investors learn yet another painful lesson from this experience: Main Street and Bay Street almost never intersect. Ms. Mcmurdy goes on to state that allowing these people “so much clout - this is, after all, a $34-billion mess - in the hands of people who are angry, inexperienced and, in the grander scheme of things, relatively small players….They feel their losses entitle them to special treatment. …… For investors, the lessons are basic ones: risk is as closely tied to reward as fear is to greed; you should always question your financial advisor closely and ask for explanations until you really do understand the product and its provenance; you should make sure your advisor understands your risk threshold and investment horizon instead of assuming anything; regularly review your portfolio statements and follow-up on items you don't understand; if your gut tells you an advisor or an investment is wrong for you - listen to it; if you think you want a piece of the "real action" and can handle products that have traditionally been reserved for the pros - like ABCP - be prepared to get bruised".....
To actually compare a 34 billion dollar fiasco to the sale of a washing machine says it all about the Ms Mcmurdy’s disrespect for these small investors as she continues in her article to state,
“But then, that happens to consumers all the time. Is a mutual fund really that different from a washing machine? We all buy things we need, even if we're not sure how they actually work. We then trust that warranty or the vendor, will help us out if it ceases to work in short order.”
Ms Mcmurdy goes on to reprimand the small investors by insulting their intelligence stating that it was
“Somewhat surprisingly, the 1,800 small investors who own the paper have been given equal voice and vote with the bigger fish like pensions funds and corporations. And that gives them some rare leverage in terms of upsetting the whole wobbling apple cart”.
Has Ms Mcmurdy ever heard about 1 share, 1 vote?
Is this the advice and the opinion of a “columnist for the National Post, Canadian Business magazine MSN Money and co-anchor of MoneyWise”??
So what are some solutions to the ABCP Credit Squeeze?
We need to investigate who are these financial advisors Ms. Mcmurdy is referring?
What are their qualifications?
These advisors in many instances are only concerned with their bonuses, salaries and commissions. For example, In HSBC's statement of defence HSBC stated that Aastra would not have cared even if it knew that the ABCP it bought was backed by complicated derivatives such as credit default swaps and collateralized debt obligations. Aastra was interested only in the credit rating on the notes and the yield (http://www.financialpost.com/creditcrunch/Story.html?id=275411).
This is a prime example of governance at its worse and it starts at the top.
Who are the directors?
What are the directors doing to help these investors?
How many boards do they sit on?
Do they have the time to know what is actually going on with investors’ paltry $ 34 billion, and do they care????
Do they have the knowledge of what an ABCP is?
Do they care?
How many actually reside in Canada?
What decision – making process did they go through to formulate these ABCPs?
Or do they know that ABCP’S exist at the companies on which they sit as board members. Please note some of these directors have JOB SECURITY FOR THE NEXT TWENTY YEARS(below)!!!!!!!!!!!!!!!
What is management doing?
If an asset-backed commercial paper (ABCP) program is composed of a bankruptcy-remote special purpose vehicle (SPV), or conduit, that issues commercial paper (CP) and uses the proceeds of such issuance primarily to obtain interests in various types of assets, either through asset purchase or secured lending transactions. And if an ABCP program includes key parties that perform various services for the conduit, credit enhancement that provides loss protection, and liquidity facilities that assist in the timely repayment of CP. Then it is prudent that an ABCP seem to be fully protected or bonded, contrary to Ms Mcmurdy’s scornful remarks to investors.
(http://pages.stern.nyu.edu/~igiddy/ABS/fitchabcp.pdf).
In this instance some of the “key parties” include, HSBC Securities Canada; Canaccord Capital Corp.; Scotia Capital Inc., and Scotia Capitaux Inc., National Bank of Canada . who were supposed “to provide the liquidity needed in the first place to roll over the paper”.
Read my article for solutions:
Critiquing and contrasting “moral” stakeholder theory and “strategic” stakeholder: implications for the board of directors
Findings – “Value” for shareholder and stakeholder may not be mutually exclusive in some instances. MST may hold the key to giving the board a more useful, comprehensive framework of the firm's utility and purpose to society.
Practical implications – Organizations may be selected on their ethical performance by investors. Depending on whether ethical criteria are included in the definition of “firm's value”, decisions about which stakeholder theory to use become an issue of strategic importance to all organizations.
Originality/value – The paper illustrates how the board of directors as the governing body of the organisation may find that continuous assessment of the company's stakeholders is valuable in reducing risks.
http://www.emeraldinsight.com/Insight/viewContainer.do;jsessionid=AFFFA9B264B7619EFFD296FC452108FB?containerType=Issue&containerId=6012734 Critiquing and contrasting “moral” stakeholder theory and “strategic” stakeholder: implications for the board of directors
Dr. Rookmin Maharaj (pp. 115-127) Keywords: Boards of directors, Decision making, Market value, Stakeholder analysis
Please take a look at the board members for some of these companies (HSBC Securities Canada; Canaccord Capital Corp.; Scotia Capital Inc., and Scotia Capitaux Inc., National Bank of Canada).
The role of the board of directors is a complex and challenging task that is weighed down with conceptual, methodological and practical difficulties. Corporate governance has become progressively more important in the business world and has become inextricably linked to the process of decision-making within corporations.
The BOD being the top level of any corporation is therefore, the body whose responsibility it is to rigorously examine and advise management about high risk and the adverse affects of packaging and reselling debt such as these asset-backed commercial papers.
The institutions that packed and re-sold the debt as a savings product - principally Scotiabank and Canaccord Capital - should UPHOLD their responsibilities, HONOUR THE TRUST; ACT IN A FIDUCIARYCAPACITY TO INVESTORS, and HONOUR the reputation of THEIR RESPECTIVE firms.
Dr Maharaj’s Corporate Governance Decision-Making model indicates that tools (Skills Matrices, Evaluations and Interconnections) and variables (Knowledge, Groupthink, and Values) have positive relationships with Decision-making. These findings have important implications for board formulation and corporate governance in the future AND MAY REDUCE THE PROBABILITY OF fiascoes like ABCP happening in the future.
Read my article:
http://www.palgrave-journals.com/ jdg/ journal/v5/n1 /abs /2050074a.html
Dr. Rookmin Maharaj has developed a unique and revolutionary model that can identify the characteristics requisite for effective Corporate Governance within an organization that strikes the ideal balance between the formal and informal rules and regulations. Dr. Maharaj has researched with the top oil and gas, mining, chemical, and pipeline companies in North America. She continues to transform ideas into actions, ultimately increasing the bottom line for organizations.
http://finance.sympatico.msn.ca/investing/deirdremcmurdy/article.aspx?cp-documentid=6671588A $34 billion made-in-Canada mess
Stated:
“There are plenty of lessons for investors and for the investment industry from a made-in-Canada credit crisis. No one ever wants to take responsibility when things go wrong. Blaming someone else for your bad decision is Human Nature 101. But in this case, that reality pretty much guarantees that the individual ABCP investors learn yet another painful lesson from this experience: Main Street and Bay Street almost never intersect. Ms. Mcmurdy goes on to state that allowing these people “so much clout - this is, after all, a $34-billion mess - in the hands of people who are angry, inexperienced and, in the grander scheme of things, relatively small players….They feel their losses entitle them to special treatment. …… For investors, the lessons are basic ones: risk is as closely tied to reward as fear is to greed; you should always question your financial advisor closely and ask for explanations until you really do understand the product and its provenance; you should make sure your advisor understands your risk threshold and investment horizon instead of assuming anything; regularly review your portfolio statements and follow-up on items you don't understand; if your gut tells you an advisor or an investment is wrong for you - listen to it; if you think you want a piece of the "real action" and can handle products that have traditionally been reserved for the pros - like ABCP - be prepared to get bruised".....
To actually compare a 34 billion dollar fiasco to the sale of a washing machine says it all about the Ms Mcmurdy’s disrespect for these small investors as she continues in her article to state,
“But then, that happens to consumers all the time. Is a mutual fund really that different from a washing machine? We all buy things we need, even if we're not sure how they actually work. We then trust that warranty or the vendor, will help us out if it ceases to work in short order.”
Ms Mcmurdy goes on to reprimand the small investors by insulting their intelligence stating that it was
“Somewhat surprisingly, the 1,800 small investors who own the paper have been given equal voice and vote with the bigger fish like pensions funds and corporations. And that gives them some rare leverage in terms of upsetting the whole wobbling apple cart”.
Has Ms Mcmurdy ever heard about 1 share, 1 vote?
Is this the advice and the opinion of a “columnist for the National Post, Canadian Business magazine MSN Money and co-anchor of MoneyWise”??
So what are some solutions to the ABCP Credit Squeeze?
We need to investigate who are these financial advisors Ms. Mcmurdy is referring?
What are their qualifications?
These advisors in many instances are only concerned with their bonuses, salaries and commissions. For example, In HSBC's statement of defence HSBC stated that Aastra would not have cared even if it knew that the ABCP it bought was backed by complicated derivatives such as credit default swaps and collateralized debt obligations. Aastra was interested only in the credit rating on the notes and the yield (http://www.financialpost.com/creditcrunch/Story.html?id=275411).
This is a prime example of governance at its worse and it starts at the top.
Who are the directors?
What are the directors doing to help these investors?
How many boards do they sit on?
Do they have the time to know what is actually going on with investors’ paltry $ 34 billion, and do they care????
Do they have the knowledge of what an ABCP is?
Do they care?
How many actually reside in Canada?
What decision – making process did they go through to formulate these ABCPs?
Or do they know that ABCP’S exist at the companies on which they sit as board members. Please note some of these directors have JOB SECURITY FOR THE NEXT TWENTY YEARS(below)!!!!!!!!!!!!!!!
What is management doing?
If an asset-backed commercial paper (ABCP) program is composed of a bankruptcy-remote special purpose vehicle (SPV), or conduit, that issues commercial paper (CP) and uses the proceeds of such issuance primarily to obtain interests in various types of assets, either through asset purchase or secured lending transactions. And if an ABCP program includes key parties that perform various services for the conduit, credit enhancement that provides loss protection, and liquidity facilities that assist in the timely repayment of CP. Then it is prudent that an ABCP seem to be fully protected or bonded, contrary to Ms Mcmurdy’s scornful remarks to investors.
(http://pages.stern.nyu.edu/~igiddy/ABS/fitchabcp.pdf).
In this instance some of the “key parties” include, HSBC Securities Canada; Canaccord Capital Corp.; Scotia Capital Inc., and Scotia Capitaux Inc., National Bank of Canada . who were supposed “to provide the liquidity needed in the first place to roll over the paper”.
Read my article for solutions:
Critiquing and contrasting “moral” stakeholder theory and “strategic” stakeholder: implications for the board of directors
Findings – “Value” for shareholder and stakeholder may not be mutually exclusive in some instances. MST may hold the key to giving the board a more useful, comprehensive framework of the firm's utility and purpose to society.
Practical implications – Organizations may be selected on their ethical performance by investors. Depending on whether ethical criteria are included in the definition of “firm's value”, decisions about which stakeholder theory to use become an issue of strategic importance to all organizations.
Originality/value – The paper illustrates how the board of directors as the governing body of the organisation may find that continuous assessment of the company's stakeholders is valuable in reducing risks.
http://www.emeraldinsight.com/Insight/viewContainer.do;jsessionid=AFFFA9B264B7619EFFD296FC452108FB?containerType=Issue&containerId=6012734 Critiquing and contrasting “moral” stakeholder theory and “strategic” stakeholder: implications for the board of directors
Dr. Rookmin Maharaj (pp. 115-127) Keywords: Boards of directors, Decision making, Market value, Stakeholder analysis
Please take a look at the board members for some of these companies (HSBC Securities Canada; Canaccord Capital Corp.; Scotia Capital Inc., and Scotia Capitaux Inc., National Bank of Canada).
The role of the board of directors is a complex and challenging task that is weighed down with conceptual, methodological and practical difficulties. Corporate governance has become progressively more important in the business world and has become inextricably linked to the process of decision-making within corporations.
The BOD being the top level of any corporation is therefore, the body whose responsibility it is to rigorously examine and advise management about high risk and the adverse affects of packaging and reselling debt such as these asset-backed commercial papers.
The institutions that packed and re-sold the debt as a savings product - principally Scotiabank and Canaccord Capital - should UPHOLD their responsibilities, HONOUR THE TRUST; ACT IN A FIDUCIARYCAPACITY TO INVESTORS, and HONOUR the reputation of THEIR RESPECTIVE firms.
Dr Maharaj’s Corporate Governance Decision-Making model indicates that tools (Skills Matrices, Evaluations and Interconnections) and variables (Knowledge, Groupthink, and Values) have positive relationships with Decision-making. These findings have important implications for board formulation and corporate governance in the future AND MAY REDUCE THE PROBABILITY OF fiascoes like ABCP happening in the future.
Read my article:
http://www.palgrave-journals.com/ jdg/ journal/v5/n1 /abs /2050074a.html
Dr. Rookmin Maharaj has developed a unique and revolutionary model that can identify the characteristics requisite for effective Corporate Governance within an organization that strikes the ideal balance between the formal and informal rules and regulations. Dr. Maharaj has researched with the top oil and gas, mining, chemical, and pipeline companies in North America. She continues to transform ideas into actions, ultimately increasing the bottom line for organizations.
Wednesday, April 16, 2008
The US IS IN A DEEP RECESSION!!!!
With the US IN DEEP RECESSION!!!! (http://www.financialpost.com/ story. html?id=326071)
Dr. Rookmin Maharaj’s Corporate Governance Model may be one of the solutions to bringing the US economy back on tract. Dr. Maharaj’s research work examines the characteristics (knowledge, groupthink, and values) and tools (interconnections, evaluations and skill matrices) can be used to select candidates to be nominated to the board to improve corporate governance Qualitative interviews with chairs, board members, CEOs in the leading energy, coal, pipeline, and chemical industries in Canada were conducted. The Quantitative phase included a survey questionnaire, which was sent to 1200 US and Canadian executives, data were collected and statistically analyzed. The findings indicated a temporal linkage between board characteristics, and tools, on decision-making, the Formal rules (SOX related rules) had no significant relationship with decision-making. Dr. Maharaj’s research is unique, as this is the first time that board characteristics have been operationalized and a model developed to test the effectiveness of directors serving on boards. “Boards and Management can no longer expected to be decorative, but are expected to exercise more influence and power and become more engaged with management, other board members and all stakeholders of the organization”(Maharaj, R., 2008).
Dr. Maharaj’s articles and blogs are a must read.
1) International Journal of Disclosure and Governance - Corporate Correspondence: ... I thank Dr James Gillies, Professor Emeritus of Policy, and founding ...www.palgrave-journals.com/jdg/journal/v5/n1/full/2050074a.html
2) http://corporategovernancesoxboards.blogspot.com/
3) Corporate Governance - Critiquing and contrasting “moral” stakeholder theory and “strategic” stakeholder: implications for the board of directors Rookmin Maharaj (pp. 115-127)
http://www.emeraldinsight.com/10.1108/14720700810863751
Purpose – This paper aims to critique moral stakeholder theory (MST) and to contrast it to earlier strategic stakeholder approach (SSA). Design/methodology/approach – Interview data were gathered from top executives at 12 companies in the energy sector in Canada and an in-depth literature review was conducted on MST and SSA. Findings – “Value” for shareholder and stakeholder may not be mutually exclusive in some instances. MST may hold the key to giving the board a more useful, comprehensive framework of the firm's utility and purpose to society. Practical implications – Organizations may be selected on their ethical performance by investors. Depending on whether ethical criteria are included in the definition of “firm's value”, decisions about which stakeholder theory to use become an issue of strategic importance to all organizations. Originality/value – The paper illustrates how the board of directors as the governing body of the organisation may find that continuous assessment of the company's stakeholders is valuable in reducing risks.
http://www.emeraldinsight.com/Insight/viewContainer.do;jsessionid=AFFFA9B264B7619EFFD296FC452108FB?containerType=Issue&containerId=6012734
Critiquing and contrasting “moral” stakeholder theory and “strategic” stakeholder: implications for the board of directors Rookmin Maharaj (pp. 115-127) Keywords: Boards of directors, Decision making, Market value, Stakeholder analysis
There are several references to the management/boards refusal to be fair to their stakeholders, for example,
1) “Senator Obama has made frequent reference to the spread between CEO compensation and average worker pay…..We have a [moral] deficit when CEOs are making more in ten minutes than some workers make in ten months."
2) According to David Rosenberg, “The U.S. economy has landed in recession, according to an economist at brokerage firm Merrill Lynch. David Rosenberg, Merrill Lynch's chief North American economist, said Friday’s employment report — which showed the U.S. jobless rate jumped to a two-year high of five per cent in December on weaker-than-expected job creation — "strongly suggests that an official recession has arrived." 'To say that the backdrop is "recession-like" is akin to an obstetrician telling a woman that she is "sort of pregnant."
References:
Dr. Rookmin Maharaj, 2008: http://www.emeraldinsight.com/10.1108/14720700810863751
http://www.cbc.ca/money/story/2008/01/08/merrilllynchrecession.html
http://www.americanthinker.com/2008/04/obama_ceo_pay_and_the_politics.html
Dr. Rookmin Maharaj’s Corporate Governance Model may be one of the solutions to bringing the US economy back on tract. Dr. Maharaj’s research work examines the characteristics (knowledge, groupthink, and values) and tools (interconnections, evaluations and skill matrices) can be used to select candidates to be nominated to the board to improve corporate governance Qualitative interviews with chairs, board members, CEOs in the leading energy, coal, pipeline, and chemical industries in Canada were conducted. The Quantitative phase included a survey questionnaire, which was sent to 1200 US and Canadian executives, data were collected and statistically analyzed. The findings indicated a temporal linkage between board characteristics, and tools, on decision-making, the Formal rules (SOX related rules) had no significant relationship with decision-making. Dr. Maharaj’s research is unique, as this is the first time that board characteristics have been operationalized and a model developed to test the effectiveness of directors serving on boards. “Boards and Management can no longer expected to be decorative, but are expected to exercise more influence and power and become more engaged with management, other board members and all stakeholders of the organization”(Maharaj, R., 2008).
Dr. Maharaj’s articles and blogs are a must read.
1) International Journal of Disclosure and Governance - Corporate Correspondence: ... I thank Dr James Gillies, Professor Emeritus of Policy, and founding ...www.palgrave-journals.com/jdg/journal/v5/n1/full/2050074a.html
2) http://corporategovernancesoxboards.blogspot.com/
3) Corporate Governance - Critiquing and contrasting “moral” stakeholder theory and “strategic” stakeholder: implications for the board of directors Rookmin Maharaj (pp. 115-127)
http://www.emeraldinsight.com/10.1108/14720700810863751
Purpose – This paper aims to critique moral stakeholder theory (MST) and to contrast it to earlier strategic stakeholder approach (SSA). Design/methodology/approach – Interview data were gathered from top executives at 12 companies in the energy sector in Canada and an in-depth literature review was conducted on MST and SSA. Findings – “Value” for shareholder and stakeholder may not be mutually exclusive in some instances. MST may hold the key to giving the board a more useful, comprehensive framework of the firm's utility and purpose to society. Practical implications – Organizations may be selected on their ethical performance by investors. Depending on whether ethical criteria are included in the definition of “firm's value”, decisions about which stakeholder theory to use become an issue of strategic importance to all organizations. Originality/value – The paper illustrates how the board of directors as the governing body of the organisation may find that continuous assessment of the company's stakeholders is valuable in reducing risks.
http://www.emeraldinsight.com/Insight/viewContainer.do;jsessionid=AFFFA9B264B7619EFFD296FC452108FB?containerType=Issue&containerId=6012734
Critiquing and contrasting “moral” stakeholder theory and “strategic” stakeholder: implications for the board of directors Rookmin Maharaj (pp. 115-127) Keywords: Boards of directors, Decision making, Market value, Stakeholder analysis
There are several references to the management/boards refusal to be fair to their stakeholders, for example,
1) “Senator Obama has made frequent reference to the spread between CEO compensation and average worker pay…..We have a [moral] deficit when CEOs are making more in ten minutes than some workers make in ten months."
2) According to David Rosenberg, “The U.S. economy has landed in recession, according to an economist at brokerage firm Merrill Lynch. David Rosenberg, Merrill Lynch's chief North American economist, said Friday’s employment report — which showed the U.S. jobless rate jumped to a two-year high of five per cent in December on weaker-than-expected job creation — "strongly suggests that an official recession has arrived." 'To say that the backdrop is "recession-like" is akin to an obstetrician telling a woman that she is "sort of pregnant."
References:
Dr. Rookmin Maharaj, 2008: http://www.emeraldinsight.com/10.1108/14720700810863751
http://www.cbc.ca/money/story/2008/01/08/merrilllynchrecession.html
http://www.americanthinker.com/2008/04/obama_ceo_pay_and_the_politics.html
Sunday, March 23, 2008
Corporate Governance and the Health System - Dr. Rookmin Maharaj
Some articles about Dr. Smith:
1) “Before leaving Ontario in disgrace a few years ago, Dr. Smith was an avid farmer of Hereford cows, helped dig up victims of the 1918 flu pandemic from the Arctic permafrost, and travelled to India to investigate a string of murders. ….. Former head of Ontario's pediatric forensic pathology unit also threatened a police officer who gave him a speeding ticket, was infamous for his sloppy work habits, and contributed to the wrongful homicide prosecutions of several parents and caregivers, sometimes with devastating consequences. In a 1994 interview with the Edmonton Journal, after a high-profile Alberta abuse case ended in acquittal, Dr. Smith is quoted as boasting that there had been convictions in all but two of the 20-25 cases of deliberate head injuries in which he testified. The key, he reportedly explained, was co-ordination between all the experts involved. "We don't cook our stories, but we identify problems," Dr. Smith was quoted as saying” http://www.nationalpost.com/news/story.html?id=268040Disgraced Ontario pathologist begins testimony - Tom Blackwell, National Post Published: Sunday, January 27, 2008
2) Dr. Charles Smith convinced most of the Sudbury, Ont., police force that a local woman had killed her toddler, and refused to change his opinion even when faced with contradictory medical evidence. "He articulated well," said the detective…"Dr. Smith didn't appear receptive to discussion or changing his opinion based on that information," Insp. Keech told the inquiry. "He seemed to maintain his opinion from the initial consultation to the final consultation." http://www.nationalpost.com/news/story.html?id=237370 - Pathologist convinced police that woman killed her child - Tom Blackwell, National Post Published: Monday, January 14, 2008
3) Reports of the 1991 meeting suggest Dr. Smith defended his findings in the case, and that someone described the judge who rejected his testimony as "strange" and from "the bottom of the heap." … The inquiry heard earlier that the judgment went virtually unnoticed by the Ontario chief coroner's office, which kept Dr. Smith in the pediatric pathology post until 2004……Dr. Huyer and Dr. Driver also described the pathologist yesterday as a professional and respectful colleague who was readily available to lend his expertise. His evangelical Christian leanings were also clear. "He did not preach to me [but] I was quite aware he had strong religious feelings," said Dr. Huyer. Dr. Smith would sometimes comment on his colleague's "aberrant" behaviour, chastising Dr. Huyer for swearing in his presence. http://www.%20nationalpost%20.com/news/story.html?id=226829 - Close
tour_comments_off = true;Reader Discussion
Court critique of pathologist set off alarm - Dr. Charles Smith -Tom Blackwell, National Post Published: Thursday, January 10, 2008
4) In a 1997 letter raised earlier, the hospital's chief pathologist at the time threatened to curtail Dr. Smith's surgical pathology activities and dock his pay because of delayed and inaccurate reports. http://www.nationalpost.com/news/ story.html?id=184728 - Smith self-taught as forensic pathologist, probe told - Public Inquiry - Tom Blackwell, National Post Published: Thursday, December 20, 2007
WHY WERE THESE CRIMINAL ACTIONS ALLOWED TO CONTINUE IN A SO CALLED 1ST WORLD COUNTRY????
This tragedy was allowed to occur because Dr. Smith was not open-minded and was not be able to think objectively even if his individual commitment was high. Open mindedness is not simply a function of how Dr. Smith felt but of how Dr. Smith ‘thought’ and that he listen only to himself. Apparently Dr. Smith was not only listening to himself but he also had many professionals convinced that he was doing a good job.
Was this a result of GROUPTHINK Mentality? Was it due to a brotherhood of ‘like’ professionals who did not want:
a) to create waves about another professional, although many knew he did ’shoddy work’; !
“The more amiability and esprit de corps among the members of a policy-making in-group, the greater is the danger that independent critical thinking will be replaced by groupthink, which is likely to result in irrational and dehumanizing actions directed against out-groups” (Janis, 1983, p. 13). This quote sums up the concept of what is defined as ‘groupthink.’
b) Groupthink refers to a deterioration of mental efficiency, reality testing, and moral judgement that results from in-group pressures and in-group ‘esprit de corps’ .
Groupthink can be:
a) grossly inadequate way the policy-makers carry out their decision-making tasks.
b) these groups show signs of high cohesiveness and of an accompanying concurrence-seeking tendency that interferes with critical thinking.
c) where the members’ strivings for unanimity override their motivation to realistically appraise alternative courses of action or even thinking rationally. In the case of Dr. Smith, the results were detrimental to many families. It included the wrongful homicide prosecutions his opinions triggered. Dr. Smith had made serious errors in 20 criminally suspicious deaths he investigated between 1991 and 2001. Parents and others were charged with homicide in most of the cases, though many have since been cleared.
HOW CAN WE ENSURE THAT THIS DOES NOT HAPPEN?
Dr. Rookmin Maharaj has developed a unique and revolutionary model that can identify the characteristics requisite for effective Corporate Governance within an health organizations, educational institutionsand businesses that strikes the ideal balance between the formal and informal rules and regulations. Dr. Maharaj has researched with the top oil and gas, mining, chemical, and pipeline companies in North America. She continues to transform ideas into actions, ultimately increasing the bottom line for She is currently consulting with companies in Alberta, Canada on Corporate Governance. She has worked in the energy sector in Alberta Canada for over fifteen years. She has a master’s degree in Higher Education and has taught in France, the Caribbean and in Canada at the University of Calgary and Mount Royal College on Environmental Management and Business. Contact:rmaharaj@ucalgary.ca, maharajl@netzero.net
1) “Before leaving Ontario in disgrace a few years ago, Dr. Smith was an avid farmer of Hereford cows, helped dig up victims of the 1918 flu pandemic from the Arctic permafrost, and travelled to India to investigate a string of murders. ….. Former head of Ontario's pediatric forensic pathology unit also threatened a police officer who gave him a speeding ticket, was infamous for his sloppy work habits, and contributed to the wrongful homicide prosecutions of several parents and caregivers, sometimes with devastating consequences. In a 1994 interview with the Edmonton Journal, after a high-profile Alberta abuse case ended in acquittal, Dr. Smith is quoted as boasting that there had been convictions in all but two of the 20-25 cases of deliberate head injuries in which he testified. The key, he reportedly explained, was co-ordination between all the experts involved. "We don't cook our stories, but we identify problems," Dr. Smith was quoted as saying” http://www.nationalpost.com/news/story.html?id=268040Disgraced Ontario pathologist begins testimony - Tom Blackwell, National Post Published: Sunday, January 27, 2008
2) Dr. Charles Smith convinced most of the Sudbury, Ont., police force that a local woman had killed her toddler, and refused to change his opinion even when faced with contradictory medical evidence. "He articulated well," said the detective…"Dr. Smith didn't appear receptive to discussion or changing his opinion based on that information," Insp. Keech told the inquiry. "He seemed to maintain his opinion from the initial consultation to the final consultation." http://www.nationalpost.com/news/story.html?id=237370 - Pathologist convinced police that woman killed her child - Tom Blackwell, National Post Published: Monday, January 14, 2008
3) Reports of the 1991 meeting suggest Dr. Smith defended his findings in the case, and that someone described the judge who rejected his testimony as "strange" and from "the bottom of the heap." … The inquiry heard earlier that the judgment went virtually unnoticed by the Ontario chief coroner's office, which kept Dr. Smith in the pediatric pathology post until 2004……Dr. Huyer and Dr. Driver also described the pathologist yesterday as a professional and respectful colleague who was readily available to lend his expertise. His evangelical Christian leanings were also clear. "He did not preach to me [but] I was quite aware he had strong religious feelings," said Dr. Huyer. Dr. Smith would sometimes comment on his colleague's "aberrant" behaviour, chastising Dr. Huyer for swearing in his presence. http://www.%20nationalpost%20.com/news/story.html?id=226829 - Close
tour_comments_off = true;Reader Discussion
Court critique of pathologist set off alarm - Dr. Charles Smith -Tom Blackwell, National Post Published: Thursday, January 10, 2008
4) In a 1997 letter raised earlier, the hospital's chief pathologist at the time threatened to curtail Dr. Smith's surgical pathology activities and dock his pay because of delayed and inaccurate reports. http://www.nationalpost.com/news/ story.html?id=184728 - Smith self-taught as forensic pathologist, probe told - Public Inquiry - Tom Blackwell, National Post Published: Thursday, December 20, 2007
WHY WERE THESE CRIMINAL ACTIONS ALLOWED TO CONTINUE IN A SO CALLED 1ST WORLD COUNTRY????
This tragedy was allowed to occur because Dr. Smith was not open-minded and was not be able to think objectively even if his individual commitment was high. Open mindedness is not simply a function of how Dr. Smith felt but of how Dr. Smith ‘thought’ and that he listen only to himself. Apparently Dr. Smith was not only listening to himself but he also had many professionals convinced that he was doing a good job.
Was this a result of GROUPTHINK Mentality? Was it due to a brotherhood of ‘like’ professionals who did not want:
a) to create waves about another professional, although many knew he did ’shoddy work’; !
“The more amiability and esprit de corps among the members of a policy-making in-group, the greater is the danger that independent critical thinking will be replaced by groupthink, which is likely to result in irrational and dehumanizing actions directed against out-groups” (Janis, 1983, p. 13). This quote sums up the concept of what is defined as ‘groupthink.’
b) Groupthink refers to a deterioration of mental efficiency, reality testing, and moral judgement that results from in-group pressures and in-group ‘esprit de corps’ .
Groupthink can be:
a) grossly inadequate way the policy-makers carry out their decision-making tasks.
b) these groups show signs of high cohesiveness and of an accompanying concurrence-seeking tendency that interferes with critical thinking.
c) where the members’ strivings for unanimity override their motivation to realistically appraise alternative courses of action or even thinking rationally. In the case of Dr. Smith, the results were detrimental to many families. It included the wrongful homicide prosecutions his opinions triggered. Dr. Smith had made serious errors in 20 criminally suspicious deaths he investigated between 1991 and 2001. Parents and others were charged with homicide in most of the cases, though many have since been cleared.
HOW CAN WE ENSURE THAT THIS DOES NOT HAPPEN?
Dr. Rookmin Maharaj has developed a unique and revolutionary model that can identify the characteristics requisite for effective Corporate Governance within an health organizations, educational institutionsand businesses that strikes the ideal balance between the formal and informal rules and regulations. Dr. Maharaj has researched with the top oil and gas, mining, chemical, and pipeline companies in North America. She continues to transform ideas into actions, ultimately increasing the bottom line for She is currently consulting with companies in Alberta, Canada on Corporate Governance. She has worked in the energy sector in Alberta Canada for over fifteen years. She has a master’s degree in Higher Education and has taught in France, the Caribbean and in Canada at the University of Calgary and Mount Royal College on Environmental Management and Business. Contact:rmaharaj@ucalgary.ca, maharajl@netzero.net
New Spitzer 'socker'! ..[LACK OF! ] Corporate Governance
http://www.nydailynews.com/news/2008/03/23/2008-03-23_eliot_spitzer_kept_on_black_stockings_fo.html?ref=nl&nltr_ct=1&nltr_id=New%20Spitzer%20
"BY RICH SCHAPIRO DAILY NEWS STAFF WRITER Sunday, March 23rd 2008, 4:00 AM
Sabo/News Eliot Spitzer A controversial political strategist sent a letter to the feds in November saying that then-Gov. Eliot Spitzer "used the services of high-priced call girls" in Florida - and kept his socks on while he did."
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Do these actions by top politicians business persons and leaders shock you?
The fact is that these people were elected, nominated or hired to these positions without due care and respect for the taxpaying public.
Where were the checks and balances, this is a case of ineffective Corporate Governance.
Effective decision making for corrective action can only occurs within an organization where there are checks and balances.
This means that there MUST BE CHANGES TO NORMS, OBJECTIVES AND POLICIES WHERE THERE ARE NO CHECKS AND BALANCES, FOR PERSONS PUT IN POSITIONS OF AUTHORITY.
ONLY WHEN THERE ARE MECHANISMS PUT IN PLACE WITHIN ORGANIZATIONS, FOR EXAMPLE, GOVERNAMETAL BODIES, CAN WE AS TAX PAYERS BE ASSURED THAT THERE IS TRANSPARENCY, ACCOUNTABILITY AND RESPONSIBILITY ASSOCIATED WITH THESE POSITIONS!!
Success is a two edge sword. Once executives/people in power or with power become successful for a period, they are less liable to be open to ‘learning’ and may create organizational defenses or a groupthink mentality. Once (through success) an executive learns to cover up his or her actions they soon view such action as necessary, practical, realistic and even caring. Once this happens [executives] tend to stop questioning the basis for ‘error’, they stop even thinking about ‘error’ or looking for ‘error’. The [executives] become insensitive and blind, and, also become blind to their insensitivity and blindness.
Business people, executives and people in power can benefit by paying more attention to the operation of ‘their values’ and how ‘their values’ affect their decision making as it is reasonable to believe that personal values are important determinants in the choice of decision-making and so affects corporate strategy.
See my blogs:
http://corporategovernanceconcerns.blogspcom/ ot.
http://corporategovernancepullupyoursox.blogspot.com/
http://corporategovernancesoxboards.blogspot.com/
http://corporategovernanceconcerns.blogspot.com/2008/02/corporate-governance-groupthink-and.html
http://corporategovernanceconcerns.blogspot.com/2008/02/sustainability-reporting-in-upstream.html
http://corporategovernanceconcerns.blogspot.com/2008/03/corporate-governance-and-health-system.html
http://corporategovernancepullupyoursox.blogspot.com/2008/01/village-swaraj-and-sustainable.html
http://corporategovernancepullupyoursox.blogspot.com/2008/03/corporate-governance-and-our-health.html
Dr. Rookmin Maharaj's Press and Publications:
1. Dr. Rookmin Maharaj addresses Corporate Governance issues.(February 2008) / M. Rookmin Maharaj, Ph.D, traite d'enjeux propres à la gouvernance d'entreprise. (Février 2008)
http://caaa.ca/Home/whatsNew/index.html
2. June 27, 2005, Mumbai : The successful award graduate recipient is Dr. Rookmin Maharaj, from University of Calgary. Dr Maharaj's project was on "Mahatma Gandhi's Village Swaraj Initiative compared with Sustainable Development seen through the eyes of Pundit Jawaharlal Nehru today". According to the Institute's President, Dr. Arun Mukherjee, "The Lal Bahadur Shastri Student Awards will further our efforts to promote knowledge and understanding between India and Canada. The awards will contribute to fostering values of tolerance, mutual respect and understanding among young Canadians attending our universities." Tata Consultancy Services (TCS) is underwriting the awards and, according to Mr. Mukesh Gupta, TCS Director of Strategic Relations in Canada "The Lal Bahadur Shastri Student Awards promote an increased awareness in bridging the gap of Indo-Canadian relations. TCS is proud to support these awards as they mirrors our efforts in the business community."
http://www.advaitaashrama.org/pb_archive/2006/PB_2006_September.pdf
3. Sustainability Reporting
Dr. Rookmin Maharaj, Haskayne School of. Business, University of Calgary:
www.iseee.ca/iseee/files/iseee/ABEnergyFutures-09.pdf
4. Publications, Reports & Presentations University of Calgary
Rookmin Maharaj presentation by Dr. Robert Mansell, ISEEE Managing Director, to IRIS Seminar Series.
www.iseee.ca/iseee/whatsnew/reports
5. Annual Report 2007
Haskayne School of Business, University of Calgary; 2005 Rookmin Maharaj. 2004 www.icaa.ab.ca/pdf/CAEFAR07unsignedFinal.pdf
6. IFBR Conference Costa Rica 2006
http://www.icaa.ab.ca/pdf/CAEFAR07unsignedFinal.pdf
7. International Journal of Disclosure and Governance - Corporate
Correspondence: ... I thank Dr James Gillies, Professor Emeritus of Policy, and founding ...
http://www.palgrave-journals.com/jdg/journal/v5/n1/pdf/2050074a.pdf
8. NY Daily News - Discussions
http://corporategovernanceconcerns.blogspot.com/
Dr. Rookmin Maharaj has developed a unique and revolutionary model that can identify the ...
www.nydailynews.com/forums/thread.jspa?threadID=12231&tstart=80&start=20
9. 'Corporate behaviour' Blogs Search on Considerably.net
PRE- EMPTIVE FORENSIC CORPORATE GOVERNANCE Dr. Rookmin Maharaj 2008-01-26 22:19:00 It is argued that a combination of legislation, regulation, ...
http://corporategovernanceconcerns.blogspot.com/2008/02/saturday-january-26-2008-pre-emptive.html
10. Table of Contents
Rookmin Maharaj, University of Calgary ..... Maharaj, Rookmin ........................ 14, 22. Mansumitrchai, Somkiat............... 28, 32 ...
www.theibfr.com/archive/PROGRAM-COSTARICA2006.pdf
11. Journal Issue: COSO 1992 control framework: Corporate governance, groupthink and bullies in the boardroom Rookmin Maharaj
http://www.palgrave-journals.com/jdg/journal/v5/n1/pdf/2050074a.pdf
12. Nova Publishers My Account Nova Publishers Shopping Cart Home ...
Haskayne School of Business, Univ. of Calgary, Calgary, Alberta, NW and Dr. Rookmin Maharaj, Univ. of Calgary, NW) Chapter 5. ...
https://www.novapublishers.com/catalog/product_info.php?products_id=5521
13. Perspectives on Teaching and Teacher Issues - Blackwell Online
Rookmin Maharaj, 79. Ch. 5, Interdisciplinary teaching : integration of physical education skills and concepts with mathematical skills and ...
bookshop.blackwell.com/jsp/id/Perspectives_on_Teaching_and_Teacher_Issues/9781600215810
14. CiteULike: Corporate governance, groupthink and bullies in the ...
@article{citeulike:2314115, author = {Maharaj and Rookmin}, citeulike-article-id = {2314115}, doi = {10.1057/palgrave.jdg.2050074}, issn = {1741-3591}, ...
www.citeulike.org/article/2314115
15. 'Corporate behaviour' Blogs Search on Considerably.net
Rookmin Maharaj 2008-01-26 22:19:00 It is argued that a combination of legislation, regulation, effective risk management and appropriate sanctions are ...
www.considerably.net/Corporate_behaviour/blogs.htm
16. Cases in Sustainable Tourism: An Experiential Approach to Making
- 2006 - 422 pages
17. Dr. Rookmin was extremely helpful with final edits and permissions. books.google.ca/books?isbn=0789027658...
18. Theses & Dissertations University of Calgary
Maharaj, Rookmin. Corporate Governance and the Board of Directors: Study of the Importance of the Role of the Formal and Informal Systems www.ucalgary.ca/igp/studentcentre/theses -
19. IngentaConnect Search Results
Author: Maharaj, Rookmin. Source: http://www.palgrave-journals.com/jdg/journal/v5/n1/pdf/2050074a.pdf
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Dr. Rookmin Maharaj Corporate Governance Consultant
Dr. Rookmin Maharaj has developed a unique and revolutionary model that can identify the characteristics requisite for effective Corporate Governance within an organization that strikes the ideal balance between the formal and informal rules and regulations. Dr. Maharaj has researched with the top oil and gas, mining, chemical, and pipeline companies in North America. She continues to transform ideas into actions, ultimately increasing the bottom line for Organizations, Political Institutions, and Educational Institutions to name a few.
Please email your comments, questions or ideas on Dr. Maharaj's blog, or at:
rmaharaj@ucalgary.ca
maharajl@netzero.com
"BY RICH SCHAPIRO DAILY NEWS STAFF WRITER Sunday, March 23rd 2008, 4:00 AM
Sabo/News Eliot Spitzer A controversial political strategist sent a letter to the feds in November saying that then-Gov. Eliot Spitzer "used the services of high-priced call girls" in Florida - and kept his socks on while he did."
***********************************************************************************
Do these actions by top politicians business persons and leaders shock you?
The fact is that these people were elected, nominated or hired to these positions without due care and respect for the taxpaying public.
Where were the checks and balances, this is a case of ineffective Corporate Governance.
Effective decision making for corrective action can only occurs within an organization where there are checks and balances.
This means that there MUST BE CHANGES TO NORMS, OBJECTIVES AND POLICIES WHERE THERE ARE NO CHECKS AND BALANCES, FOR PERSONS PUT IN POSITIONS OF AUTHORITY.
ONLY WHEN THERE ARE MECHANISMS PUT IN PLACE WITHIN ORGANIZATIONS, FOR EXAMPLE, GOVERNAMETAL BODIES, CAN WE AS TAX PAYERS BE ASSURED THAT THERE IS TRANSPARENCY, ACCOUNTABILITY AND RESPONSIBILITY ASSOCIATED WITH THESE POSITIONS!!
Success is a two edge sword. Once executives/people in power or with power become successful for a period, they are less liable to be open to ‘learning’ and may create organizational defenses or a groupthink mentality. Once (through success) an executive learns to cover up his or her actions they soon view such action as necessary, practical, realistic and even caring. Once this happens [executives] tend to stop questioning the basis for ‘error’, they stop even thinking about ‘error’ or looking for ‘error’. The [executives] become insensitive and blind, and, also become blind to their insensitivity and blindness.
Business people, executives and people in power can benefit by paying more attention to the operation of ‘their values’ and how ‘their values’ affect their decision making as it is reasonable to believe that personal values are important determinants in the choice of decision-making and so affects corporate strategy.
See my blogs:
http://corporategovernanceconcerns.blogspcom/ ot.
http://corporategovernancepullupyoursox.blogspot.com/
http://corporategovernancesoxboards.blogspot.com/
http://corporategovernanceconcerns.blogspot.com/2008/02/corporate-governance-groupthink-and.html
http://corporategovernanceconcerns.blogspot.com/2008/02/sustainability-reporting-in-upstream.html
http://corporategovernanceconcerns.blogspot.com/2008/03/corporate-governance-and-health-system.html
http://corporategovernancepullupyoursox.blogspot.com/2008/01/village-swaraj-and-sustainable.html
http://corporategovernancepullupyoursox.blogspot.com/2008/03/corporate-governance-and-our-health.html
Dr. Rookmin Maharaj's Press and Publications:
1. Dr. Rookmin Maharaj addresses Corporate Governance issues.(February 2008) / M. Rookmin Maharaj, Ph.D, traite d'enjeux propres à la gouvernance d'entreprise. (Février 2008)
http://caaa.ca/Home/whatsNew/index.html
2. June 27, 2005, Mumbai : The successful award graduate recipient is Dr. Rookmin Maharaj, from University of Calgary. Dr Maharaj's project was on "Mahatma Gandhi's Village Swaraj Initiative compared with Sustainable Development seen through the eyes of Pundit Jawaharlal Nehru today". According to the Institute's President, Dr. Arun Mukherjee, "The Lal Bahadur Shastri Student Awards will further our efforts to promote knowledge and understanding between India and Canada. The awards will contribute to fostering values of tolerance, mutual respect and understanding among young Canadians attending our universities." Tata Consultancy Services (TCS) is underwriting the awards and, according to Mr. Mukesh Gupta, TCS Director of Strategic Relations in Canada "The Lal Bahadur Shastri Student Awards promote an increased awareness in bridging the gap of Indo-Canadian relations. TCS is proud to support these awards as they mirrors our efforts in the business community."
http://www.advaitaashrama.org/pb_archive/2006/PB_2006_September.pdf
3. Sustainability Reporting
Dr. Rookmin Maharaj, Haskayne School of. Business, University of Calgary:
www.iseee.ca/iseee/files/iseee/ABEnergyFutures-09.pdf
4. Publications, Reports & Presentations University of Calgary
Rookmin Maharaj presentation by Dr. Robert Mansell, ISEEE Managing Director, to IRIS Seminar Series.
www.iseee.ca/iseee/whatsnew/reports
5. Annual Report 2007
Haskayne School of Business, University of Calgary; 2005 Rookmin Maharaj. 2004 www.icaa.ab.ca/pdf/CAEFAR07unsignedFinal.pdf
6. IFBR Conference Costa Rica 2006
http://www.icaa.ab.ca/pdf/CAEFAR07unsignedFinal.pdf
7. International Journal of Disclosure and Governance - Corporate
Correspondence: ... I thank Dr James Gillies, Professor Emeritus of Policy, and founding ...
http://www.palgrave-journals.com/jdg/journal/v5/n1/pdf/2050074a.pdf
8. NY Daily News - Discussions
http://corporategovernanceconcerns.blogspot.com/
Dr. Rookmin Maharaj has developed a unique and revolutionary model that can identify the ...
www.nydailynews.com/forums/thread.jspa?threadID=12231&tstart=80&start=20
9. 'Corporate behaviour' Blogs Search on Considerably.net
PRE- EMPTIVE FORENSIC CORPORATE GOVERNANCE Dr. Rookmin Maharaj 2008-01-26 22:19:00 It is argued that a combination of legislation, regulation, ...
http://corporategovernanceconcerns.blogspot.com/2008/02/saturday-january-26-2008-pre-emptive.html
10. Table of Contents
Rookmin Maharaj, University of Calgary ..... Maharaj, Rookmin ........................ 14, 22. Mansumitrchai, Somkiat............... 28, 32 ...
www.theibfr.com/archive/PROGRAM-COSTARICA2006.pdf
11. Journal Issue: COSO 1992 control framework: Corporate governance, groupthink and bullies in the boardroom Rookmin Maharaj
http://www.palgrave-journals.com/jdg/journal/v5/n1/pdf/2050074a.pdf
12. Nova Publishers My Account Nova Publishers Shopping Cart Home ...
Haskayne School of Business, Univ. of Calgary, Calgary, Alberta, NW and Dr. Rookmin Maharaj, Univ. of Calgary, NW) Chapter 5. ...
https://www.novapublishers.com/catalog/product_info.php?products_id=5521
13. Perspectives on Teaching and Teacher Issues - Blackwell Online
Rookmin Maharaj, 79. Ch. 5, Interdisciplinary teaching : integration of physical education skills and concepts with mathematical skills and ...
bookshop.blackwell.com/jsp/id/Perspectives_on_Teaching_and_Teacher_Issues/9781600215810
14. CiteULike: Corporate governance, groupthink and bullies in the ...
@article{citeulike:2314115, author = {Maharaj and Rookmin}, citeulike-article-id = {2314115}, doi = {10.1057/palgrave.jdg.2050074}, issn = {1741-3591}, ...
www.citeulike.org/article/2314115
15. 'Corporate behaviour' Blogs Search on Considerably.net
Rookmin Maharaj 2008-01-26 22:19:00 It is argued that a combination of legislation, regulation, effective risk management and appropriate sanctions are ...
www.considerably.net/Corporate_behaviour/blogs.htm
16. Cases in Sustainable Tourism: An Experiential Approach to Making
- 2006 - 422 pages
17. Dr. Rookmin was extremely helpful with final edits and permissions. books.google.ca/books?isbn=0789027658...
18. Theses & Dissertations University of Calgary
Maharaj, Rookmin. Corporate Governance and the Board of Directors: Study of the Importance of the Role of the Formal and Informal Systems www.ucalgary.ca/igp/studentcentre/theses -
19. IngentaConnect Search Results
Author: Maharaj, Rookmin. Source: http://www.palgrave-journals.com/jdg/journal/v5/n1/pdf/2050074a.pdf
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Dr. Rookmin Maharaj Corporate Governance Consultant
Dr. Rookmin Maharaj has developed a unique and revolutionary model that can identify the characteristics requisite for effective Corporate Governance within an organization that strikes the ideal balance between the formal and informal rules and regulations. Dr. Maharaj has researched with the top oil and gas, mining, chemical, and pipeline companies in North America. She continues to transform ideas into actions, ultimately increasing the bottom line for Organizations, Political Institutions, and Educational Institutions to name a few.
Please email your comments, questions or ideas on Dr. Maharaj's blog, or at:
rmaharaj@ucalgary.ca
maharajl@netzero.com
Tuesday, February 19, 2008
Dr Rookmin Maharaj has developed a unique Corporate Governance Model increasing the bottom line profits for organizations
Dr. Rookmin Maharaj has developed a unique and revolutionary model that can identify the characteristics requisite for effective Corporate Governance within an organization that strikes the ideal balance between the formal and informal rules and regulations. Dr. Maharaj has researched with the top oil and gas, mining, chemical, and pipeline companies in North America. She continues to transform ideas into actions, ultimately increasing the bottom line for organizations.
Thursday, February 14, 2008
CORPORATE GOVERNANCE, GROUPTHINK AND BULLIES IN THE BOARDROOM Dr Rookmin Maharaj
EXECUTIVE SUMMARY:
This research study discusses corporate governance issues from a behavioural viewpoint. It makes a distinction between strict adherence to formal rules and regulations: CEO/Chair separation, independence of board members and board size and informal characteristics of board members: knowledge, values and groupthink.There are three main conclusions:1) This research clearly proves that formal rules and regulations are inadequate; they have little effect upon decision making by board members. Informal characteristics must be considered in unison with the formal system when nominating board members in order to restore shareholder confidence and to rebuild trust in board governance.2) Similar values and groupthink can contribute positively to board members' decision making. There is, however, a high possibility for groupthink and values to become redundant, masking board members' knowledge.3) Skills matrices that include questions related to values, knowledge and groupthink and three behavioural characteristics should be considered by boards to ensure the nomination of well-rounded members.
Changes to board process, and board decision making, are seminal in preventing future Enron and WorldCom fiascos. It is only by changing the behaviours of the board of directors, through adopting skills matrices, that sweeping changes can occur.
In the past, boards have asked: who are our board members? The most important question a board can ask today, however, is: how can the skills and knowledge of our board members be used in service of the strategic direction of the corporation? This can be achieved by recruiting new board members who fill the needs of an organisation, in contrast to nominating 'friends' and continuing the tradition of the old boys club.
It should be noted that out of the 100 of the largest economies in the world, 57 of these are corporations and 49 are countries. Corporations are powerful entities in our society, operating in a manner similar to representative governments. Like heads of government, at the top echelon of each corporation is the board of directors; their decisions have enormous ramifications for everyone.
Although most citizens have a limited or a passive interest in corporate governance, we each depend on these corporations for jobs, salaries and as investors. Governance of these gargantuan corporations, which wield considerable economic power in the world, concerns each and every citizen.
My research draws novel conclusions about the state of governance today, and presents practical solutions for corporations to consider when selecting board members. The detailed discussion about what happens in the boardroom demystifies board process and provides the bases for three critical objectives when selecting new board members or evaluating current board members performance:
1) ascertain and embellish the knowledge base of directors;
2) motivate directors to share and gather information to ensure personal values are congruent with organisational values; and
3) ensure clear and fluent transmission channels exist to reduce the potential of having groupthink on board.view Dr.Rookmin Maharaj's full journal article at:
http://www.palgrave-journals.com/jdg/journal/vaop/ncurrent/abs/2050074a.html
Posted by Dr. Rookmin Maharaj at 8:21 AM
Labels: behavior, boards, corporate governance, decision making, directors, Dr. Rookmin Maharaj, oil and gas, SOX
3 comments:
Anonymous said...
nice job
January 13, 2008 6:42 PM
Anonymous said...
What's happening in the different areas in society? Financial? educational? governmental? Just look at the housing market in the US? What impact would this Corporate Governace Model you talk about have on improving the system in these sectors?
January 31, 2008 10:52 AM
Anonymous said...
No one wants to take responsibility when things go bad in a corporation......but when things seem to be going good it is always "I was responsible for implementing this or that." I think that corporations are being run by a bunch of crooks, what do you think?
February 7, 2008 7:57 AM
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PRE- EMPTIVE FORENSIC CORPORATE GOVERNANCE Dr. Rookmin Maharaj
Saturday, January 26, 2008
While corporate failures, such as Enron, WorldCom, Tyco International Ltd, Peregrine Systems, iVillage, Adelphia Communications Corp, Hollinger International , Barings Bank and the recent Societe Generale bank have focused attention on issues of accounting and financial indiscretion, there is nothing inherently new in the reasons behind these corporate collapses. Neither is there anything original in the media's hurry to name a scapegoat. For example, at “Barings Futures Singapore (BFS)'s [the] management’s structure through 1995 enabled Leeson to operate without supervision from London headquarters. Leeson was not only the floor manager for Barings' trading division on the Singapore International Monetary Exchange, he was also the head of settlement operations. Leeson was responsible for ensuring that accurate accounting information was reported to the unit.
Normally the head of settlement operations and floor manager would have been held by two different employees. In other words Leeson reported to himself. This absence of checks and balances short-circuited normal accounting and auditing safeguards. After the collapse, several observers, including Leeson himself, placed much of the blame on the bank's own deficient internal auditing and risk management practices. People at the London end of Barings were all [know- it- all’s] that nobody dared ask a stupid question in case they looked silly in front of everyone else” (http://en.wikipedia.org/wiki/Barings_Bank).
SO WHO GAVE LEESON ALL THIS AUTONOMY? WAS IT NOT TOP EXECUTIVES??If …… “Most important, the corrective actions taken to date [cannot] be sufficient to reduce the frequency and magnitude of corporate bankruptcies. …Without changes in the policy-related conditions that contribute to corporate failure, improved accounting and auditing procedures [will] accelerate bankruptcies with little effect on their frequency or magnitude. Almost all of the public and press attention, however, has focused on reducing the accounting violations, not on those policies that contribute to business failure. The major lesson from the collapse of Enron and other large corporations is that the rules of corporate governance do not adequately protect the interests of the general shareholders against the increasingly divergent interests of corporate managers" (www.cato.org/pubs/handbook/hb108/hb108-22.pdf).
It is argued that a combination of legislation, regulation, effective risk management and appropriate sanctions are needed, if such unethical behaviour, and resulting corporate failure, is to be prevented in future.
However, what is required is an astute, independent, assessment of these financial collapse debacles. This may establish that failures within these companies' corporate cultures and management systems allow, if not encourage, unethical behaviour by key individuals.
COULD IT BE THAT THE CONTINUATION OF THE OLD BOYS CLUB may be the fundamental reason for the blatant disregard and perception of invincibility/groupthink mentality of same.
COULD IT BE THAT ONCE AN EMPLOYEE IS INCREASING THE PROFITS AND BOTTOM LINE OF AN ORGANIZATION HE/SHE IS SHELTERED BY TOP EXECUTIVES, WHO MAY TURN A BLIND EYE TO UNETHICAL PRACTICES?
Dr. Rookmin Maharaj’s research on:Corporate Governance and the Board of Directors:Study of the Importance of the Role of the Formal & Informal Systems Investigated corporate governance issues from a behavioural viewpoint and makes a clear distinction between strict adherence to formal rules and regulations that is, CEO/Chair separation, independence of board members and board size and informal characteristics of board members: knowledge, values, and groupthink.There are three main conclusions from her research and corporate experience:
1. Clearly proves that formal rules and regulations are inadequate; they have little effect upon decision making by board members. Informal characteristics must be considered in unison with the formal system when nominating board members, management and employees in order to restore shareholder confidence and to rebuild trust in corporate governance.
2. Similar values and groupthink can contribute positively to corporate decision making. However, there is a high possibility for groupthink and values to become redundant, masking board members’ and managements’ knowledge thus affecting their decision making process.
3. Skills matrices that include questions related to values, knowledge and groupthink should be considered by corporations to ensure the nomination of well-rounded members, management and employees.Changes to board process, and board decision making, are seminal in preventing future Enron and WorldCom fiascoes. It is only by changing the behaviours of the board of directors, through adopting skills matrices, that sweeping changes can occur.
In the past boards have asked: who are our board members? However, the most important question a board can ask today is: how can the skills and knowledge of our board members be used in service of the strategic direction of the corporation?
This can be achieved by recruiting new board members, management and employees who fill the needs of an organization, in contrast to nominating ‘friends’ and continuing the tradition of the old boys club.
Dr. Maharaj argues that, and has tangible evidence, that what should be done is a forensic audit on 'the people that we hire' and 'employees, managers, board members' should also conduct an audit on their potential employers. What is your opinion?Does your opinion change with this update?According to alleged rogue trader Jerome Kerviel, " his bosses turned a blind eye to his massive, questionable trades as long as he made money for the bank"(EMMA VANDORE, http://ap.google.com/article/ALeqM5h4ncvzDOrXAnqyB9avT4zvg1iJTQD8UG7MBG0Societe Generale Board Meets).
Posted by Dr. Rookmin Maharaj at 2:05 PM
10 comments:
Anonymous said...
Dr.Maharaj,Do you really believe that the old boys network still work today?
January 29, 2008 11:39 AM
Dr. Rookmin Maharaj said...
The old boys/girls network is alive in many different manifestations. For example, there are many studies/research that indicate that people hire those that are similar to themselves. Is this a manifestation of the old boys/girls network? Of course it is!!!
January 29, 2008 2:24 PM
Anonymous said...
How then do you ensure board independence?
January 29, 2008 2:30 PM
Dr. Rookmin Maharaj said...
You can and will ensure board independence by using Dr. MAHARAJ'S corporate governance model. This model was developed after two years of research conducted on 1200 CEOs, Chairs, board members and upper management in Canada and the United States.
The premise of my corporate governance model is that nominees to the board are pre screened, not only regarding their technical knowledge, or who they may know on the board, but on their values. Are their values congruent with those of the organization? Does the potential board member fit with the other board members, will he or she have the will to ask tough questions of other board members and of management? This can be accomplished with an in-depth skill matrix in the pre-assessment stage. Then the post stage follows with an annual peer review and evaluations on each board member including the chair and CEO. These evaluations should be conducted by a (independent) third party.
February 4, 2008 7:03 AM
Anonymous said...
Why are there so few women on boards?
February 4, 2008 12:28 PM
Anonymous said...
Taking into context recent events in the stock market, should boards have forseen the enormous losses? What could they have done differently?
February 4, 2008 12:31 PM
Anonymous said...
With all the regulations in existence, there are still too many corporate scandals. How can this be avoided,if at all?
February 4, 2008 12:33 PM
Dr. Rookmin Maharaj said...
In recent interviews I conducted with several Chairs, board members, and CEOs, I asked questions about “boards’ foresight regarding situations that are just inappropriate, whether the actions or inaction by management and the board manifest as losses to shareholders or blatant fraud perpetrated by the board and management.” The general consensus is that boards’ are in a position to govern, not manage the day to day operations of an organization.
However, if the board realizes that the CEO/management are taking advantage of stakeholders, there is lag time that it takes to actually oust a CEO and this affects the amount of losses that may occur. In order to reduce the probability of management/CEO taking advantage of stakeholders, boards members must be vigilant and astute by questioning management if they have concerns about risky projects or are aware of improper risks being undertaken by management and quick and precise action should be taken by the board to rectify the indiscretion.However, there is not only the principal-agent problem for shareholders/stakeholders to consider. In today’s global economy stakeholders cannot depend solely on the invisible hand. Stakeholders must investigate and look at who are the board members. Is there collusion between board and management, there is the ‘old boys’ network’ to consider.
In a recent high profile fraud case one board member (a well RESPECTED U.S. attorney) stated that he ‘skimmed’ documents that were given to him by management since he believed that if there was anything amiss management would have advised him. In other words this example suggests that board members are yes men/women to management. A reasonable person may be under the impression that the board of directors will enforce and ensure that the agents (CEO/management) will not take unfair advantage of the principals (investors, shareholders and all stakeholders).
According to modern governance theory the board of directors is considered the intercessor to the principal-agent problem. But in most of our corporations in Canada and the United States the principals are the agents they are one and the same or alternatively this is called the ‘small pool problem.’ As investors, community members, and stakeholders we as individuals must make a concerted effort to exercise our right as shareholders/stakeholders to ensure we police the police (board members), remember we can attend annual meetings and chose to vote out the board.
February 6, 2008 8:08 AM
Anonymous said...
This post has been removed by a blog administrator.
February 7, 2008 6:50 AM
Dr. Rookmin Maharaj said...
Q: With all the regulations in existence, there are still too many corporate scandals. How can this be avoided,if at all?A: This question of more rules and regulations!!!, rules and regulations can only act as a guide. An important issue is who are these people who are chosen as board members?
We NEED TO wake up to reality. If board members are handpicked by management there must be a reason, for example, in a recent high profile fraud case, an experienced, well respected audit chair ‘under oath’ stated that ‘the documents he SKIMMED were prepared by management and counsel, and if anything was INCORRECT he RELIED ON MANAGEMENT TO DRAW HIS ATTENTION TO THE non-compete agreements’. THIS, MAY I REMIND YOU was A WELL RESPECTED AUDIT CHAIR!
The fact is that he left due diligence to management, in other words he left his job to management, and rubber stamped their decision. The questions remain, was this audit chair unaware that his job involved investigating whether non-compete payments are legal in the pertinent jurisdiction or he was aware of this and instead of ‘causing waves’ or being a ‘trouble maker’ he succumbed to a groupthink mentality?
“Groupthink occurs when a person’s thought process and decision-making capabilities become marred by peer pressure. This may cause the group to overestimate their power and morality, causing the members to ignore the ethical or moral consequences of their decisions. This behaviour can encourage an illusion of invulnerability, creating excessive optimism and encourage the group to take extreme risks” (Maharaj, 2007).
The probability of nominating board members with a groupthink mentality can be reduced by using Dr. Maharaj’s Corporate Governance decision making model. Dr. Maharaj’s research is based on both qualitative and quantitative research conducted over a period of two years on over 1,200 executives in both Canada and the united States.Dr. Maharaj’s Corporate Governance decision making model suggests that there is a temporal linkage between board characteristics which are Values, Groupthink and Knowledge and the three tools Evaluations, Skills Matrices, Interconnections on Decision-making (Maharaj, thesis, 2007).
Therefore, corporations, Universities, health care organizations, and political institutions, (to name a few) should use Dr. Maharaj’s model to nominate board members who are not afraid to question the status quo or encourage creative tension in the board room instead of being merely parsley on fish. References:Maharaj, R., (2008). International Journal of Disclosure and Governance, 5, 68–92 "Corporate governance, groupthink and bullies in the boardroom. "Maharaj, 2007, Thesis Dissertation.
February 7, 2008 6:52 AM
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While corporate failures, such as Enron, WorldCom, Tyco International Ltd, Peregrine Systems, iVillage, Adelphia Communications Corp, Hollinger International , Barings Bank and the recent Societe Generale bank have focused attention on issues of accounting and financial indiscretion, there is nothing inherently new in the reasons behind these corporate collapses. Neither is there anything original in the media's hurry to name a scapegoat. For example, at “Barings Futures Singapore (BFS)'s [the] management’s structure through 1995 enabled Leeson to operate without supervision from London headquarters. Leeson was not only the floor manager for Barings' trading division on the Singapore International Monetary Exchange, he was also the head of settlement operations. Leeson was responsible for ensuring that accurate accounting information was reported to the unit.
Normally the head of settlement operations and floor manager would have been held by two different employees. In other words Leeson reported to himself. This absence of checks and balances short-circuited normal accounting and auditing safeguards. After the collapse, several observers, including Leeson himself, placed much of the blame on the bank's own deficient internal auditing and risk management practices. People at the London end of Barings were all [know- it- all’s] that nobody dared ask a stupid question in case they looked silly in front of everyone else” (http://en.wikipedia.org/wiki/Barings_Bank).
SO WHO GAVE LEESON ALL THIS AUTONOMY? WAS IT NOT TOP EXECUTIVES??If …… “Most important, the corrective actions taken to date [cannot] be sufficient to reduce the frequency and magnitude of corporate bankruptcies. …Without changes in the policy-related conditions that contribute to corporate failure, improved accounting and auditing procedures [will] accelerate bankruptcies with little effect on their frequency or magnitude. Almost all of the public and press attention, however, has focused on reducing the accounting violations, not on those policies that contribute to business failure. The major lesson from the collapse of Enron and other large corporations is that the rules of corporate governance do not adequately protect the interests of the general shareholders against the increasingly divergent interests of corporate managers" (www.cato.org/pubs/handbook/hb108/hb108-22.pdf).
It is argued that a combination of legislation, regulation, effective risk management and appropriate sanctions are needed, if such unethical behaviour, and resulting corporate failure, is to be prevented in future.
However, what is required is an astute, independent, assessment of these financial collapse debacles. This may establish that failures within these companies' corporate cultures and management systems allow, if not encourage, unethical behaviour by key individuals.
COULD IT BE THAT THE CONTINUATION OF THE OLD BOYS CLUB may be the fundamental reason for the blatant disregard and perception of invincibility/groupthink mentality of same.
COULD IT BE THAT ONCE AN EMPLOYEE IS INCREASING THE PROFITS AND BOTTOM LINE OF AN ORGANIZATION HE/SHE IS SHELTERED BY TOP EXECUTIVES, WHO MAY TURN A BLIND EYE TO UNETHICAL PRACTICES?
Dr. Rookmin Maharaj’s research on:Corporate Governance and the Board of Directors:Study of the Importance of the Role of the Formal & Informal Systems Investigated corporate governance issues from a behavioural viewpoint and makes a clear distinction between strict adherence to formal rules and regulations that is, CEO/Chair separation, independence of board members and board size and informal characteristics of board members: knowledge, values, and groupthink.There are three main conclusions from her research and corporate experience:
1. Clearly proves that formal rules and regulations are inadequate; they have little effect upon decision making by board members. Informal characteristics must be considered in unison with the formal system when nominating board members, management and employees in order to restore shareholder confidence and to rebuild trust in corporate governance.
2. Similar values and groupthink can contribute positively to corporate decision making. However, there is a high possibility for groupthink and values to become redundant, masking board members’ and managements’ knowledge thus affecting their decision making process.
3. Skills matrices that include questions related to values, knowledge and groupthink should be considered by corporations to ensure the nomination of well-rounded members, management and employees.Changes to board process, and board decision making, are seminal in preventing future Enron and WorldCom fiascoes. It is only by changing the behaviours of the board of directors, through adopting skills matrices, that sweeping changes can occur.
In the past boards have asked: who are our board members? However, the most important question a board can ask today is: how can the skills and knowledge of our board members be used in service of the strategic direction of the corporation?
This can be achieved by recruiting new board members, management and employees who fill the needs of an organization, in contrast to nominating ‘friends’ and continuing the tradition of the old boys club.
Dr. Maharaj argues that, and has tangible evidence, that what should be done is a forensic audit on 'the people that we hire' and 'employees, managers, board members' should also conduct an audit on their potential employers. What is your opinion?Does your opinion change with this update?According to alleged rogue trader Jerome Kerviel, " his bosses turned a blind eye to his massive, questionable trades as long as he made money for the bank"(EMMA VANDORE, http://ap.google.com/article/ALeqM5h4ncvzDOrXAnqyB9avT4zvg1iJTQD8UG7MBG0Societe Generale Board Meets).
Posted by Dr. Rookmin Maharaj at 2:05 PM
10 comments:
Anonymous said...
Dr.Maharaj,Do you really believe that the old boys network still work today?
January 29, 2008 11:39 AM
Dr. Rookmin Maharaj said...
The old boys/girls network is alive in many different manifestations. For example, there are many studies/research that indicate that people hire those that are similar to themselves. Is this a manifestation of the old boys/girls network? Of course it is!!!
January 29, 2008 2:24 PM
Anonymous said...
How then do you ensure board independence?
January 29, 2008 2:30 PM
Dr. Rookmin Maharaj said...
You can and will ensure board independence by using Dr. MAHARAJ'S corporate governance model. This model was developed after two years of research conducted on 1200 CEOs, Chairs, board members and upper management in Canada and the United States.
The premise of my corporate governance model is that nominees to the board are pre screened, not only regarding their technical knowledge, or who they may know on the board, but on their values. Are their values congruent with those of the organization? Does the potential board member fit with the other board members, will he or she have the will to ask tough questions of other board members and of management? This can be accomplished with an in-depth skill matrix in the pre-assessment stage. Then the post stage follows with an annual peer review and evaluations on each board member including the chair and CEO. These evaluations should be conducted by a (independent) third party.
February 4, 2008 7:03 AM
Anonymous said...
Why are there so few women on boards?
February 4, 2008 12:28 PM
Anonymous said...
Taking into context recent events in the stock market, should boards have forseen the enormous losses? What could they have done differently?
February 4, 2008 12:31 PM
Anonymous said...
With all the regulations in existence, there are still too many corporate scandals. How can this be avoided,if at all?
February 4, 2008 12:33 PM
Dr. Rookmin Maharaj said...
In recent interviews I conducted with several Chairs, board members, and CEOs, I asked questions about “boards’ foresight regarding situations that are just inappropriate, whether the actions or inaction by management and the board manifest as losses to shareholders or blatant fraud perpetrated by the board and management.” The general consensus is that boards’ are in a position to govern, not manage the day to day operations of an organization.
However, if the board realizes that the CEO/management are taking advantage of stakeholders, there is lag time that it takes to actually oust a CEO and this affects the amount of losses that may occur. In order to reduce the probability of management/CEO taking advantage of stakeholders, boards members must be vigilant and astute by questioning management if they have concerns about risky projects or are aware of improper risks being undertaken by management and quick and precise action should be taken by the board to rectify the indiscretion.However, there is not only the principal-agent problem for shareholders/stakeholders to consider. In today’s global economy stakeholders cannot depend solely on the invisible hand. Stakeholders must investigate and look at who are the board members. Is there collusion between board and management, there is the ‘old boys’ network’ to consider.
In a recent high profile fraud case one board member (a well RESPECTED U.S. attorney) stated that he ‘skimmed’ documents that were given to him by management since he believed that if there was anything amiss management would have advised him. In other words this example suggests that board members are yes men/women to management. A reasonable person may be under the impression that the board of directors will enforce and ensure that the agents (CEO/management) will not take unfair advantage of the principals (investors, shareholders and all stakeholders).
According to modern governance theory the board of directors is considered the intercessor to the principal-agent problem. But in most of our corporations in Canada and the United States the principals are the agents they are one and the same or alternatively this is called the ‘small pool problem.’ As investors, community members, and stakeholders we as individuals must make a concerted effort to exercise our right as shareholders/stakeholders to ensure we police the police (board members), remember we can attend annual meetings and chose to vote out the board.
February 6, 2008 8:08 AM
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February 7, 2008 6:50 AM
Dr. Rookmin Maharaj said...
Q: With all the regulations in existence, there are still too many corporate scandals. How can this be avoided,if at all?A: This question of more rules and regulations!!!, rules and regulations can only act as a guide. An important issue is who are these people who are chosen as board members?
We NEED TO wake up to reality. If board members are handpicked by management there must be a reason, for example, in a recent high profile fraud case, an experienced, well respected audit chair ‘under oath’ stated that ‘the documents he SKIMMED were prepared by management and counsel, and if anything was INCORRECT he RELIED ON MANAGEMENT TO DRAW HIS ATTENTION TO THE non-compete agreements’. THIS, MAY I REMIND YOU was A WELL RESPECTED AUDIT CHAIR!
The fact is that he left due diligence to management, in other words he left his job to management, and rubber stamped their decision. The questions remain, was this audit chair unaware that his job involved investigating whether non-compete payments are legal in the pertinent jurisdiction or he was aware of this and instead of ‘causing waves’ or being a ‘trouble maker’ he succumbed to a groupthink mentality?
“Groupthink occurs when a person’s thought process and decision-making capabilities become marred by peer pressure. This may cause the group to overestimate their power and morality, causing the members to ignore the ethical or moral consequences of their decisions. This behaviour can encourage an illusion of invulnerability, creating excessive optimism and encourage the group to take extreme risks” (Maharaj, 2007).
The probability of nominating board members with a groupthink mentality can be reduced by using Dr. Maharaj’s Corporate Governance decision making model. Dr. Maharaj’s research is based on both qualitative and quantitative research conducted over a period of two years on over 1,200 executives in both Canada and the united States.Dr. Maharaj’s Corporate Governance decision making model suggests that there is a temporal linkage between board characteristics which are Values, Groupthink and Knowledge and the three tools Evaluations, Skills Matrices, Interconnections on Decision-making (Maharaj, thesis, 2007).
Therefore, corporations, Universities, health care organizations, and political institutions, (to name a few) should use Dr. Maharaj’s model to nominate board members who are not afraid to question the status quo or encourage creative tension in the board room instead of being merely parsley on fish. References:Maharaj, R., (2008). International Journal of Disclosure and Governance, 5, 68–92 "Corporate governance, groupthink and bullies in the boardroom. "Maharaj, 2007, Thesis Dissertation.
February 7, 2008 6:52 AM
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SUSTAINABILITY REPORTING IN THE UPSTREAM PETROLEUM INDUSTRY IN CANADA Rookmin Maharaj
Sunday, January 13, 2008
SUSTAINABILITY REPORTING IN THE UPSTREAM PETROLEUM INDUSTRY IN CANADA
OBJECTIVES :There are four different reporting guidelines that could be used by Canadian upstream petroleum companies in the preparation of sustainability reports. These four guidelines are:• Enhanced Business Reporting Framework (EBR);• Global Reporting Initiative Guidelines (GRI);• Sustainability Reporting Guidelines by International Petroleum Industry Environmental Conservation Association (IPIECA) and American Petroleum Institute (API); and• Stewardship Benchmarking Guide produced by the Canadian Association of Petroleum Producers (CAPP).The current research compares these guidelines and attempts to determine what obstacles they present, if any, for both preparers and users of sustainability reports. We present recommendations for streamlining the reporting process and making it easier to access sustainability information for use in decision making.Please visit the published report at:http://www.iseee.ca/iseee/files/iseee/ABEnergyFutures-09.pdf
Posted by Dr. Rookmin Maharaj at 12:24 PM
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SUSTAINABILITY REPORTING IN THE UPSTREAM PETROLEUM INDUSTRY IN CANADA
OBJECTIVES :There are four different reporting guidelines that could be used by Canadian upstream petroleum companies in the preparation of sustainability reports. These four guidelines are:• Enhanced Business Reporting Framework (EBR);• Global Reporting Initiative Guidelines (GRI);• Sustainability Reporting Guidelines by International Petroleum Industry Environmental Conservation Association (IPIECA) and American Petroleum Institute (API); and• Stewardship Benchmarking Guide produced by the Canadian Association of Petroleum Producers (CAPP).The current research compares these guidelines and attempts to determine what obstacles they present, if any, for both preparers and users of sustainability reports. We present recommendations for streamlining the reporting process and making it easier to access sustainability information for use in decision making.Please visit the published report at:http://www.iseee.ca/iseee/files/iseee/ABEnergyFutures-09.pdf
Posted by Dr. Rookmin Maharaj at 12:24 PM
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PERSPECTIVES ON TEACHING AND TEACHER ISSUES Rookmin Maharaj
Sunday, January 13, 2008
PERSPECTIVES ON TEACHING AND TEACHER ISSUES
Teaching is a profession which is so enormous and so packed with significance that the issues related to it have a consistently high ranking with members of society in virtually every public opinion poll. These issues include multicultural education, teacher training and accreditation, burn-out, teaching under conditions particular to a worldwide certain country, student behavior and preparation, computers in the classroom, parental influence on the teaching process, the changing curriculum and its meaning for teaching, budgetary problems, and a multitude of similar issues. This new book presents issues current to the field from educators and researchers from around the globe.Table of Contents: Chapter 4.- Developing Critical Thinking Skills through the use of Computer-Mediated Conferencing; pp. 79-99
Posted by Dr. Rookmin Maharaj at 8:57 AM
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PERSPECTIVES ON TEACHING AND TEACHER ISSUES
Teaching is a profession which is so enormous and so packed with significance that the issues related to it have a consistently high ranking with members of society in virtually every public opinion poll. These issues include multicultural education, teacher training and accreditation, burn-out, teaching under conditions particular to a worldwide certain country, student behavior and preparation, computers in the classroom, parental influence on the teaching process, the changing curriculum and its meaning for teaching, budgetary problems, and a multitude of similar issues. This new book presents issues current to the field from educators and researchers from around the globe.Table of Contents: Chapter 4.- Developing Critical Thinking Skills through the use of Computer-Mediated Conferencing; pp. 79-99
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VILLAGE SWARAJ AND SUSTAINABLE DEVELOPMENT Mahatma Gandhi
VILLAGE SWARAJ AND SUSTAINABLE DEVELOPMENT
Mahatma Gandhi.s Ideas as Seen through the Eyes of Pandit Jawaharlal Nehru TodayPlease visit Dr. Rookmin Maharaj's article at:http://www.advaitaashrama.org/pb_archive/2006/PB_2006_September.pdf
Posted by Dr. Rookmin Maharaj at 9:00 AM
2 comments:
Anonymous said...
If Ghandi was alive today what are some comments,in your opinion, would he have made pertaining to global warming?
February 7, 2008 8:00 AM
Dr. Rookmin Maharaj said...
Global warming is a term used very loosely today, according to wikipedia.org, “the term "global warming" is a specific example of climate change, which can also refer to global cooling. In common usage, the term refers to recent warming and implies a human influence. The United Nations Framework Convention on Climate Change (UNFCCC) uses the term "climate change" for human-caused change, and "climate variability" for other changes. Human influence in this case refers to our influence on the earth due to our everyday activities as humans. Our everyday activities as humans are influenced by our needs, however, in 2008 our needs are overshadowed by our WANTS. Our WANTS as humans are dictated by big business, marketing enterprises and the invisible hand(s). Let us take a look at what are some of the causes of global warming:Carbon Dioxide from Power Plants In 2002 about 40% of U.S. carbon dioxide emissions stem from the burning of fossil fuels for the purpose of electricity generation. Coal accounts for 93 percent of the emissions from the electric utility industry. (US Emissions Inventory 2004 Executive Summary pg. 10).Carbon Dioxide Emitted from Cars About 33% of U.S carbon dioxide emissions come from the burning of gasoline in internal-combustion engines of cars and light trucks (minivans, sport utility vehicles, pick-up trucks, and jeeps.)(US Emissions Inventory 2006 pg. 8)The United States is the largest consumer of oil, using 20.4 million barrels per day.If Mahatma Gandhi was alive today I do not think his comments with regard to global warming would be any different to his advise in 1947 as mentioned in the Journal article VILLAGE SWARAJ AND SUSTAINABLE DEVELOPMENT. Mahatma Gandhi noted that we as humans, fail to ask a fundamental question which the Mahatma used as a benchmark to determine the viability of progress, the question is:“Does moral progress increase in the same proportion as material progress?Mahatma Gandhi believed, if we use this gauge when initiating any technological advancement we may avoid reaping the negative or adverse effects of development in the long term. Like the business of poverty or the business of the reintroduction of once eradicated diseases or the business of the sale of weaponery, the business of global warming is now the new fad. One person has even won the nobel prize for mass producing a sophisticated power point presentation about this topic. I conclude my answer to your question “If Ghandi was alive today what are some comments,in your opinion, would he have made pertaining to global warming?” with the conclusion in my Journal article VILLAGE SWARAJ AND SUSTAINABLE DEVELOPMENT:Conclusion:Bapu, it would be foolish to assume that we have all the answers to our current global problems in the form of Purna Swaraj and sustainable initiatives. However, you once advised another discouraged soul saying, .Please do not carry unnecessarily on your head the burden of emancipating India [or the world]. In your emancipation is the emancipation of India [and the world]. All else is make-believe. Additionally, your prophetic words echo our woes today: It is not the British [or globalization] that are responsible for the misfortunes of India [or the world] but we who have succumbed to modern civilization [marketing ploys of big multinationals]. And the solution: It is not an attempt to go back to the so-called ignorant Dark Age. It is an attempt to see beauty in voluntary simplicity, poverty and slowness. (xvi). Extrapolating the words of the Bhagavadgita to this context, being able to discriminate between what is truth and what is untruth with respect to honouring our sacred earth is of prime essence. It was because of our inability to discriminate that India was lost to the British in the first place. Are we to lose our earth in the same way? This means, of course, that as consumers each one of us can effect positive changes. We can compost our vegetable waste in our gardens We can plant vegetables. We can try to encourage manufacturers to reduce packaging (they will change if we as consumers do not buy over-packaged products). We have to stop following the Jones’s or Singhs and carpool and reduce our carbon emissions. We can refuse to change our cars only for the sake of getting the latest model. We can look into the viability of using wind power or solar power. It is amazing how much electricity can be generated from one windmill. These are just some small steps, but I truly believe like you, Bapu, that when others see the positive tangible results in small initiatives, bigger things can happen. As you said, India [the world] was once looked upon as a golden land, because Indians [people] then were people of sterling worth. The land is still the same but the people have changed and that is why it has become arid. To transform it into a golden land again we must transmute ourselves into gold by leading a life of virtue. The philosopher .s stone which can bring this about consists of two syllables: satya (truth). If therefore every Indian [person] makes it a point to follow truth always, India [the world] will achieve swaraj as a matter of course. (xlii). Make no mistake if the West does not outwardly look polluted, as for example Calgary. We just need to drive a few miles to Caroline, Alberta, where sour gas wells are emitting volumes of toxic waste in the air. In Fort Mc- Murray, the oil sand complexes emit thousands of pounds of raw toxic waste both in the air and in the rivers and streams (refer to endnote 6). Today it is essential for each one of us to know that governments can sustain geographical borders, but there are no borders that can contain toxins spreading from one part of the earth to the other by air or water. We have to adhere to satya; we have to know that we are all abusing our earth and find ways to reduce our footprints that we will all leave on this very sacred earth. Yours,Jawaharlal (Maharaj, R. 2006)
February 12, 2008 8:16 AM
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Mahatma Gandhi.s Ideas as Seen through the Eyes of Pandit Jawaharlal Nehru TodayPlease visit Dr. Rookmin Maharaj's article at:http://www.advaitaashrama.org/pb_archive/2006/PB_2006_September.pdf
Posted by Dr. Rookmin Maharaj at 9:00 AM
2 comments:
Anonymous said...
If Ghandi was alive today what are some comments,in your opinion, would he have made pertaining to global warming?
February 7, 2008 8:00 AM
Dr. Rookmin Maharaj said...
Global warming is a term used very loosely today, according to wikipedia.org, “the term "global warming" is a specific example of climate change, which can also refer to global cooling. In common usage, the term refers to recent warming and implies a human influence. The United Nations Framework Convention on Climate Change (UNFCCC) uses the term "climate change" for human-caused change, and "climate variability" for other changes. Human influence in this case refers to our influence on the earth due to our everyday activities as humans. Our everyday activities as humans are influenced by our needs, however, in 2008 our needs are overshadowed by our WANTS. Our WANTS as humans are dictated by big business, marketing enterprises and the invisible hand(s). Let us take a look at what are some of the causes of global warming:Carbon Dioxide from Power Plants In 2002 about 40% of U.S. carbon dioxide emissions stem from the burning of fossil fuels for the purpose of electricity generation. Coal accounts for 93 percent of the emissions from the electric utility industry. (US Emissions Inventory 2004 Executive Summary pg. 10).Carbon Dioxide Emitted from Cars About 33% of U.S carbon dioxide emissions come from the burning of gasoline in internal-combustion engines of cars and light trucks (minivans, sport utility vehicles, pick-up trucks, and jeeps.)(US Emissions Inventory 2006 pg. 8)The United States is the largest consumer of oil, using 20.4 million barrels per day.If Mahatma Gandhi was alive today I do not think his comments with regard to global warming would be any different to his advise in 1947 as mentioned in the Journal article VILLAGE SWARAJ AND SUSTAINABLE DEVELOPMENT. Mahatma Gandhi noted that we as humans, fail to ask a fundamental question which the Mahatma used as a benchmark to determine the viability of progress, the question is:“Does moral progress increase in the same proportion as material progress?Mahatma Gandhi believed, if we use this gauge when initiating any technological advancement we may avoid reaping the negative or adverse effects of development in the long term. Like the business of poverty or the business of the reintroduction of once eradicated diseases or the business of the sale of weaponery, the business of global warming is now the new fad. One person has even won the nobel prize for mass producing a sophisticated power point presentation about this topic. I conclude my answer to your question “If Ghandi was alive today what are some comments,in your opinion, would he have made pertaining to global warming?” with the conclusion in my Journal article VILLAGE SWARAJ AND SUSTAINABLE DEVELOPMENT:Conclusion:Bapu, it would be foolish to assume that we have all the answers to our current global problems in the form of Purna Swaraj and sustainable initiatives. However, you once advised another discouraged soul saying, .Please do not carry unnecessarily on your head the burden of emancipating India [or the world]. In your emancipation is the emancipation of India [and the world]. All else is make-believe. Additionally, your prophetic words echo our woes today: It is not the British [or globalization] that are responsible for the misfortunes of India [or the world] but we who have succumbed to modern civilization [marketing ploys of big multinationals]. And the solution: It is not an attempt to go back to the so-called ignorant Dark Age. It is an attempt to see beauty in voluntary simplicity, poverty and slowness. (xvi). Extrapolating the words of the Bhagavadgita to this context, being able to discriminate between what is truth and what is untruth with respect to honouring our sacred earth is of prime essence. It was because of our inability to discriminate that India was lost to the British in the first place. Are we to lose our earth in the same way? This means, of course, that as consumers each one of us can effect positive changes. We can compost our vegetable waste in our gardens We can plant vegetables. We can try to encourage manufacturers to reduce packaging (they will change if we as consumers do not buy over-packaged products). We have to stop following the Jones’s or Singhs and carpool and reduce our carbon emissions. We can refuse to change our cars only for the sake of getting the latest model. We can look into the viability of using wind power or solar power. It is amazing how much electricity can be generated from one windmill. These are just some small steps, but I truly believe like you, Bapu, that when others see the positive tangible results in small initiatives, bigger things can happen. As you said, India [the world] was once looked upon as a golden land, because Indians [people] then were people of sterling worth. The land is still the same but the people have changed and that is why it has become arid. To transform it into a golden land again we must transmute ourselves into gold by leading a life of virtue. The philosopher .s stone which can bring this about consists of two syllables: satya (truth). If therefore every Indian [person] makes it a point to follow truth always, India [the world] will achieve swaraj as a matter of course. (xlii). Make no mistake if the West does not outwardly look polluted, as for example Calgary. We just need to drive a few miles to Caroline, Alberta, where sour gas wells are emitting volumes of toxic waste in the air. In Fort Mc- Murray, the oil sand complexes emit thousands of pounds of raw toxic waste both in the air and in the rivers and streams (refer to endnote 6). Today it is essential for each one of us to know that governments can sustain geographical borders, but there are no borders that can contain toxins spreading from one part of the earth to the other by air or water. We have to adhere to satya; we have to know that we are all abusing our earth and find ways to reduce our footprints that we will all leave on this very sacred earth. Yours,Jawaharlal (Maharaj, R. 2006)
February 12, 2008 8:16 AM
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